The transportation deal, it stinketh

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If your taxes go up again, this time you can thank Virginia Republicans.

From the Richmond Times-Dispatch

The negotiators _ five delegates and five senators _ signed off on a compromise that would replace Virginia’s 17 1/2 cents-per-gallon gasoline tax with a 3.5 percent wholesale tax on gasoline and 6 percent on diesel fuel, boost sales taxes from 5 percent to 5.3 percent, levy a $100 fee on hybrid cars and shift about $200 million a year in sales taxes to highway use in five years.

In easier to understand terms, part of what this does:

  • Ties a reduction in the gas tax to the addition of an Internet sales tax. That’s right, you’ll be paying taxes on Amazon or anything else you order online.
  • If that happens the gas tax rate jumps to 5%, not a significant changes from where it is now.
  • It gives localities the power to tax.
  • It hikes the sales tax.

And it does nothing to change how transportation funding is spent.

From the Richmond Tea Party, reasons to oppose this bill:

  • This bill “generates additional funding for transportation”. We all know that means tax increases. The estimates are an increase in revenue in the range of $2B over the next five years. This is after subtracting the loss of the gasoline tax. Does it matter what the tax is called if they want it to be higher?
  • This bill eliminates the gasoline tax and replaces it with a portion of the newly increased sales tax. This breaks the alignment of taxing a product based on who uses that product or service.
  • The vehicle registration fee will be raised. This additional revenue will be used for a Mass Transit and Intercity Passenger Rail Fund.
  • There is a dedicated revenue stream to the tune of $300M for the Dulles Metrorail Extension – a project that regional planners have been working on for decades.
  • Our transportation problems don’t need more money – the entire system needs to be reformed.

Lt. Governor Candidate E.W. Jackson issued this statement:

“Instead of making hard decisions on how to tackle Virginia’s transportation needs, some of our elected officials in Richmond have decided to increase taxes and fees on the Commonwealth’s hard working families. We have to break the fixation that the solution to every need is to throw more money at the problem. People are fed up with it. We need leadership in Richmond willing to make hard decisions about spending and our transportation needs, not just find another excuse to reach into the pockets of taxpayers.”

Lt. Governor Candidate Pete Snyder said the following:

“Virginia’s families and job-creators already face the threat of new taxes from Washington Democrats, and the fact that any Republicans in Richmond would even consider piling on with new taxes of their own is dead wrong. Just like Washington, our problem isn’t that Virginia taxes too little, it’s that our government spends too much. I’m not a career politician, but I have a successful record of creating jobs in the real world. It’s pretty simple—there is a clear path to solving our fiscal problems, and we can do so by getting our spending priorities in order, taking as little money as possible from taxpayers, and making Virginia a haven for companies that will create jobs and grow our economy.”

Lt. Governor Candidate Susan Stimpson issued the following statement:

Republicans control Richmond. Tax cuts? Nope. Spending cuts? Nope. Conservative solutions? Of course not.

Just like Washington, when you hear the word “compromise” coming out of Richmond, it never means working together to cut taxes and spending. It always means spend more and tax more–no hard choices involved.

We still need to see all the details, but press reports indicate that the General Assembly’s transportation funding overhaul is a massive tax increase that rivals Mark Warner’s 2004 tax increase. It’s estimated to be a total $6.1 billion over five years. If this tax increases passes, Republicans will own it. The plan includes:

The current 17.5 cents per gallon gas tax would be replaced with a 3.5 percent wholesale tax paid by distributors and a 6 percent wholesale tax on diesel fuel;

The 5 percent retail sales tax paid on most purchases increases to 5.3 percent;

A $100 annual fee on alternative fuel vehicles, including hybrids, would be created;

Increases the current 3 percent sales tax paid on the purchase of motor vehicles to 4 percent;

Relies on the potential of Congress opening the way for an internet sales tax. If the federal government fails to do so, the revenue it would have generated will be replaced with an additional 1.6 percent tax applied to wholesale gasoline.

There is still no lock box to ensure revenue from this tax increase actually goes to transportation.

The plan allows part of the sales tax increase to go to education and other general fund spending instead of transportation. While some general fund revenue will be shifted to transportation, it is still clear the General Assembly is unwilling to make the hard cuts necessary to make transportation spending a top budget priority.

And of course no Richmond compromise would be complete without a shell game. Instead of taxing Virginians when they purchase gasoline, taxes will be paid on the wholesale purchase and passed along to consumers.

When will Richmond understand we are taxed enough already? Virginia has a spending problem. The budget has doubled in the last 12 years because of Democrat politicians and Republican politicians have lacked to the courage to make real cuts.

In Stafford County I have cut taxes and cut spending—real cuts—and I promise you that as your next Lieutenant Governor, I will do everything in my power to ensure the same results in Richmond.

I’ve not seen a statement from Jeannemarie Devolites Davis.

Lt. Governor candidates Delegate Scott Lingamfelter and Senator Steve Martin, along with Attorney General Candidates Delegate Rob Bell and Senator Mark Obenshain, will have the opportunity to vote on this plan.

Remember, these people want our support in November.

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