DOVER, Del. (AP) - A proposal by Democratic lawmakers to raise motor vehicle fees to pay for road and infrastructure improvements cleared the House on a straight party-line vote Thursday.
The legislation was approved on a 25-16 vote, just meeting the required three-fifth majority, with no Republican support.
The legislation now goes to the Senate, where it would need Republican support to get the required vote majority.
The legislation increases the tax on car sales from 3.75 percent to 4.25 percent. Penalties for late license and registration renewals, along with several other fees, would increase substantially.
The increases would take effect Oct. 1 and generate about $24 million annually.
Supporters say the increases, which are supported by the state chamber of commerce and other business groups, will generate much-needed funds for Delaware’s roads and bridges and create jobs.
“We want to make sure we keep a safe, reliable and efficient transportation system,” said House Majority Leader Valerie Longhurst, D-Delaware City, noting that the Delaware Department of Transportation has repaired some 30,000 potholes since this past winter.
But opponents say the increases will be a hardship for working-class and low-income people, and that lawmakers can free up needed road funds by cutting spending and making smarter use of taxpayer money.
“This is the wrong move - the wrong move at the wrong time,” said House Minority Leader Danny Short, R-Seaford.
Passage of the legislation, which was quietly introduced by Democrats late last Thursday, will make negotiations between Democrats and Republicans on infrastructure spending more difficult.
A key sticking point is the ongoing use of transportation trust fund money, which is supposed to be used only for capital needs, to pay for Department of Transportation operating expenses and other budget needs. In his past two budget proposals, Gov. Jack Markell has called for diverting $40 million from the transportation trust fund to help balance the general fund budget.
Democrats have signaled that they are willing to shift $10 million in operating expenses back into the trust fund, but Republicans want much more.
Short has called for moving DelDOT’s $235 million operating budget from the trust fund back into the general fund in annual installments of $35 million to $40 million, which he says would free up more than $1 billion for road construction.
Meanwhile, lawmakers continue to consider other revenue options for road projects, including increasing borrowing and raising gas taxes.
State transportation officials have said they are facing a deficit of $780 million over the next six years for needed road repairs and delayed projects.
Last year, Markell proposed a 10-cent increase in Delaware’s gas tax and $50 million in additional annual borrowing to increase spending on roads and bridges by $500 million over five years. The election-year proposal was dead on arrival in the General Assembly.
Markell issued a statement describing Thursday’s House vote as an important step to properly funding Delaware’s infrastructure.
“Today’s bill, if it passes the Senate, will enable DelDOT to improve the safety of our roads, reduce congestion, and create quality middle-class jobs,” he said.
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