Governor Kaine Introduces Special Session Transportation Proposal

Governor Tim Kaine today introduced a three-prong transportation plan to address statewide and regional transportation needs.

At the statewide level, the Governor proposes to:

• Increase the Motor Vehicle Sales and Use (Titling) Tax by 1 percentage point (to 4%) and the annual vehicle registration fee by $10 and dedicate the proceeds to the Highway Maintenance and Operation Fund (HMOF).
• Transfer 1% of the existing Motor Vehicle Sales and Use Tax and existing $35 minimal Motor Vehicle Sales and Use Tax to Maintenance (HMOF).
• Impose a 25-cent per $100 Grantors Tax to be invested in a “Transportation Change Fund” for Transit Capital and Operating (65%), Rail Capital and Operating (10%), Transportation Partnership Opportunity Fund (13.5%), Airports (4%) and Ports (7.5%).

At the regional level, the Governor proposes to:

• Impose a 1% Regional Retail Sales and Use Tax in Hampton Roads and Northern Virginia to replace revenues lost by the Virginia Supreme Court’s ruling that the regional transportation authorities lacked the power to impose the regional taxes and fees included in HB 3202.

Hampton Roads’ regional tax will generate $192.5 million per year in FY2010.  All revenues will be dedicated to its seven most important regional priorities.

Northern Virginia’s regional tax will generate $351 million per year in FY2010.  Revenues will be distributed using the HB 3202 formula – 40% to localities, $50 million to WMATA, $25 million to VRE and remaining funds to “regional projects.”

For more details on the Governor’s Plan, click here.