Sunday, December 7, 2003

A key Republican lawmaker will propose increasing Virginia’s gasoline tax to help pay for transportation projects, but Democratic Gov. Mark Warner’s support for the increase is shaky.

Delegate Harry J. Parrish, Manassas Republican and chairman of the Finance Committee, is drafting a bill that would increase the state’s tax to 24 cents per gallon, up from its current 17.5 cents. The extra revenue — about $300 million — would go to the state’s transportation-construction fund.

“Transportation is one of the urgent needs of the commonwealth. Most of my constituents want something done for transportation. They are tired of spending three hours a day in their car,” Mr. Parrish said.

A motorist who fills a 15-gallon tank would pay 97.5 cents more with each fill-up under the Parrish proposal.

If the increase is approved, Virginia’s 24-cent gas tax would be slightly higher than Maryland’s and significantly higher than the District’s. Maryland’s gas tax, which hasn’t increased in a decade, is 23.5 cents per gallon; the District’s is 20 cents per gallon.

In addition to state taxes, the federal government adds a tax of 18.4 cents per gallon.

Virginia’s gas tax has remained unchanged for 17 years, said Steve Haner, chief lobbyist for the Virginia Chamber of Commerce, which supports an increase to pay for highway, rail and port projects.

“A significant increase in the gas tax would go a long way, but we want to guarantee that money stays in transportation. … All this does is adjust for 17 years of inflation,” Mr. Haner said, adding that the chamber supports a tax increase of no less than 6 cents per gallon.

However, Mr. Warner did not include a gas-tax increase in the sweeping tax-reform plan he presented last month.

“The governor is keeping an open mind about different elements, but he asks that the legislature consider his plan in its entirety first,” said Warner spokeswoman Ellen Qualls.

The Warner plan calls for increasing the 2.5-cents-a-pack cigarette tax, the nation’s lowest, to 25 cents; and raising the 4.5 percent sales tax to 5.5 percent, which would produce about $1 billion in revenue each year. The governor’s plan would also increase the income tax to 6.25 percent from 5.7 percent for residents whose taxable income is more than $100,000 a year.

Mr. Warner said his plan, which he estimates would net about $600 million in revenue, would reduce taxes for 65 percent of Virginians as it phases out the car tax and decreases the 4 percent grocery-sales tax to 2.5 percent by 2005.

Some Republicans have begun accusing Mr. Warner of breaking a campaign pledge to not raise taxes.

In a speech to Republican loyalists in Tysons Corner on Saturday, former Gov. James S. Gilmore III criticized Mr. Warner’s proposal to increase the general sales tax, calling it “the single biggest tax increase in the history of Virginia.”

State Republican Party Chairman Kate Obenshain Griffin told a luncheon Saturday that “we will not and must not miss a single opportunity to point out the fact that Mark Warner has drawn his credibility into serious question by officially breaking his solemn campaign promise not to raise our taxes.”

Though other Republicans are seeking to increase the gas tax, many are dubbing it a “user fee,” saying the boost is needed to keep up with inflation.

When the General Assembly convenes Jan. 14, both houses will propose gas-tax increases.

State Sen. Martin E. Williams, Newport News Republican, told the Daily Press in August that he wants the state to consider raising the gas tax by 5 cents. Mr. Williams didn’t return calls from The Washington Times on Friday.

Mr. Parrish said he has spoken with Mr. Warner, who said he would sign the bill if it passes the General Assembly. It would become effective July 1 if signed into law.

Ms. Qualls said the governor would rather the General Assembly first consider his plan before putting forth their own.

She said the Warner plan would put about the same amount into the transportation fund as would a gas-tax increase, but use different means by returning a portion of the insurance-premium tax and debt service on federal notes. These funds have been diverted for other programs in the past, and Ms. Qualls said redirecting them to transportation would provide the equivalent of a 4 cents-per-gallon gas-tax increase.

“The governor put forward a plan he thinks is fair and equitable and honors our existing transportation commitments,” Ms. Qualls said, adding that Mr. Warner feels that all of Virginia’s transportation needs are not being met.

AAA Mid-Atlantic found in a mid-October survey that 59 percent of area residents would support raising the gas tax if the money is safeguarded, said Deborah DeYoung, AAA’s public and government relations manager.

“People are by and large willing to pay gas taxes, but are determined that money should be used for transportation programs,” Miss DeYoung said.

Arthur Purves, president of the Fairfax County Taxpayers Alliance, said his group opposes a gas-tax increase because its members feel the state should use income taxes for transportation.

“Transportation is government’s lowest priority. That should change,” Mr. Purves said. “If higher taxes were going to solve our problems, our problems would be solved.”

Others say a tax increase would unfairly burden motorists in rural areas.

This article is based in part on wire service reports.

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