Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 17, 1993 TAG: 9311170151
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LEXINGTON LENGTH: Long
A special joint committee of the Virginia General Assembly meeting Tuesday at Virginia Military Institute heard support for an increase in transportation funding from two powerful groups of business and government leaders.
The committee heard specific proposals for tax increases from one of the private groups and from its own staff, including increases in the state's 17.7-cent gas tax of from five cents to nine cents.
E. Morgan Massey, a retired Richmond coal executive, said the citizens' legislative advisory group of which he is chairman has agreed that Virginia lacks an adequate source of funding for its transportation needs.
After the meeting, Massey warned that Virginia is losing its competitive edge to Maryland and North Carolina because of the importance of unfunded transportation projects. Part of the funding problem is caused by more fuel-efficient vehicles that pay less in taxes, he said.
The Virginia Department of Transportation says the state has $52 billion in transportation construction needs through the year 2010 and can raise $27 billion of that amount through current funding sources.
Highway construction needs account for $37 billion, with mass transit, rail and airports accounting for the rest.
The state needs to maintain its transportation system to remain "economically viable," state Sen. Hunter Andrews, D-Hampton, told conference attendees.
Andrews, who heads the special General Assembly committee studying transportation funding, said Virginia has the lowest fuel tax of any of its surrounding states with the exception of Kentucky. The state hasn't raised its fuel tax since 1986 and is one of the lowest-tax states in the nation, he said.
No one can dispute the needs, Andrews said, pointing out that the use of the state's roads increased by 60 percent in the 1980s and is 13 percent above the national per-capita average.
"The commonwealth faces a transportation crisis that threatens both our citizens' quality of life and economic well being," said Ralph "Bill" Axselle, the spokesman for Virginians for Better Transportation, a group whose core membership comes from the state's construction and transportation industries. Its president is Roanoke road contractor John C. Lanford.
His group has "reluctantly concluded" that it is impossible for the state to raise all of the $1.2 billion in additional revenue that it needs annually, said Axselle, a Richmond lawyer and former member of the House of Delegates. But, he said, the group urges that an effort be made to raise half that much yearly.
One suggested tax scenario that Axselle described would involve:
A 7-cent-per-gallon increase in the gasoline tax, which would raise $252 million annually.
An increase in the motor-vehicle sales tax from 3 percent to 4 percent to raise $95 million.
Making trucks and buses pay a larger share of the costs of highway construction and maintenance, which would raise $90 million annually.
Increases of 1 percentage point in the motor-vehicle rental tax and $1 in motor-vehicle license fees that would raise another $9.1 million a year.
Axselle suggested another 2-cent increase in the gasoline tax to pay for $920 million in transportation bonds.
But a suggestion that a bond sale not require a statewide referendum could run into problems with Gov.-elect George Allen, who has said he wouldn't accept the sale of any revenue bonds without a referendum.
An interview with Allen in Tuesday's Richmond Times-Dispatch also indicated that the new governor might not welcome new taxes for transportation. He is not convinced that a tax increase is necessary or justified, Allen said in that interview.
But Andrews, chairman of the Senate Finance Committee as well as the special transportation study committee, said he read the interview to say that Allen has "an open mind" on tax increases for transportation.
Andrews - without mentioning the new governor by name - took issue with Allen's suggestion that the state Department of Transportation is not being run efficiently.
"We are fortunate we have an efficient transportation system . . . not to say it can't be run more efficiently," Andrews said.
Axselle said his group expects Allen to look for savings in the administration of the Transportation Department and commends him for that; but he said a 10 percent savings would provide just $4 million more per year for construction.
Glenn S. Tittermary, senior division chief with the state's Joint Legislative Audit Review Commission, presented the Andrews' committee two possible revenue packages that would raise $265.5 million and $342 million respectively.
The packages contain five- to seven-cent increases in the gasoline tax, eight- to nine-cent increases in the additional "road-use" fuel taxes truckers pay, and measures designed to have trucks and buses pay a more equitable share, compared to automobiles, of the cost of road construction and maintenance.
The next meeting of Andrews' committee is Dec. 7. Andrews asked Massey's committee to review revenue-tax proposals from the Department of Transportation and others and report back.
Andrews said he would ask for public comment on any new tax proposals before recommending them to the General Assembly.
by CNB