Our View: Purity in the dust

Posted: May 18, 2013

This past Monday, Gov. McDonnell signed into law what has been hailed as a landmark compromise in the protracted effort to fund transportation improvements in the commonwealth. A day later, we met with state Sen. Jill Holtzman Vogel as part of our protracted effort . . . to make heads or tails of this Rube Goldbergian piece of legislation.

Mrs. Vogel boiled the bill down to its political essence — namely the desire to craft legislation that would 1) appeal to politicians on both sides of the aisle, especially in the evenly divided Senate; 2) let folks from Accomack to Abingdon know the General Assembly was actually “getting somewhere” on this core issue; and 3) generate enough revenue to truly get something done. Adding fuel (no pun intended) to this fire was a sense of urgency — an “overwhelming notion” — that a measure be passed in this last year of Mr. McDonnell’s tenure.

Thus, a tall order, to be sure, but as Mrs. Vogel told us, the revenue part was perhaps the most challenging, as it spawned the most contentious debates. Would the state adhere to its time-honored approach of a direct user’s fee — i.e., the excise tax on fuel, which had remained steady at 17.5 cents per gallon for more than 20 years — or would it opt for an equation with greater “fluidity”?

Mrs. Vogel acknowledges the former path “made good sense,” and is classically Virginian with its pay-as-you-go principles and an absence of “smoke and mirrors.” The only problem: Such a funding method, so the numbers indicated, was “stagnant.” As a result, for example, of heightened CAFE standards and the increasing use of alternative-fuel vehicles (hybrids and the like), it was simply not producing dollars sufficient to build new highways as well as maintain the state’s current road system.

So, rather than raise the excise tax and preserve the tradition of a pure user’s fee — not only our preferred alternative but also that, Mrs. Vogel discovered, of many folks in the 27th District — the General Assembly approved what she accurately describes as a “mish-mash.” In other words, revenue generated from myriad sources through a melange of taxes — e.g., increases not only in the sales and use tax rate (from 5.0 percent to 5.3 percent) but also in the percentage of current sales tax revenue dedicated to transportation (from 0.5 percent to 0.675 percent, incrementally phased in), realization of “new” revenue from the Marketplace Fairness (or “Internet”) tax still hanging fire in Congress, increases in the tax on hybrid or “electric” vehicles (from $50 annually to $64) and in the motor vehicle titling tax (from 3 percent to 4.15 percent), and, finally, the elimination of the excise tax on fuel in favor of taxes (3.5 percent for gasoline and 6 percent for diesel) levied on the wholesale price “at the rack.”

“Mish-mash” may be too kind a description — and, likewise, “Goldbergian.” Perhaps “witch’s brew” is more accurate. And, somewhat gentler, “convoluted.” Whatever the pejorative term of choice, the bill left us with more questions than answers — like, for instance . . .