January 23, 2013

Contacts: Delegates Dave Albo, Joe May, and Tom Rust
Phone: (804) 698-1042; (804) 698-1033; (804) 698-1086

Delegates Albo, May, and Rust Present Suggested Amendments to Governor’s Transportation Plan 

Richmond, VA— In Northern Virginia, when asked what is the most important issue facing Virginia, most people respond with the same answer—transportation.  Regardless of party affiliation, it seems that citizens throughout the state are coming together to demand solutions to this growing problem.

Last week, Governor McDonnell outlined a bold agenda aimed at solving this problem by suggesting alternative modes of generating revenue.  He proposed increasing the sales tax by .8%, and eliminating the 17.5¢/gal gas tax.  While the plan offers a starting point, it still needs work.

“While we like most of the plan, there are parts of it upon which we can improve,” stated Delegate Dave Albo from Fairfax County.  “It’s like trying to make a pizza.  The Governor has given us a pizza with pepperoni and pineapple.  But we don’t like pineapple.  We’d rather have sausage. Our bill takes off the pineapple (the elimination of the gas tax) and puts on the sausage (the elimination of the food tax).”

The Albo/May/Rust bill increases the sales tax by ½ cent, and eliminates the current 2.5% tax on food.  These tax changes would deliver more revenue to transportation, and lower taxes for Virginia families.  For example, a family of four making $40,000/year would pay $55 more in sales tax, but save $173 on food, resulting in a savings of $99/year.  And a family of four making $140,000/year would save $165/year.

The one problem with eliminating the food tax is that it reduces the amount of money going to the General Fund.  To make up for this, the delegates would place a tax on out-of-state businesses that perform services in the state.  Currently, out-of-state businesses avoid many of the taxes that in-state businesses are subject to merely because they are incorporated in another state.  This bill makes them pay the same amount as in-state businesses.  The Albo/May/Rust plan would also increase fees on alternative fuel vehicles—vehicles that do not currently contribute an equivalent amount to transportation funding, and creates a mechanism to collect sales tax on internet sales (Under present law, people are required to pay sales tax on goods they buy on the internet, but the retailers do not collect it.  This bill implements the Governor’s proposal which requires these retailers to collect Virginia sales tax).  This bill also allows local governments to impost a ½ cent sales tax to pay for local roads.  Even with this additional tax, people will not pay more in taxes due to their savings from the elimination of the food tax.  The attached charts explain the bill in detail.

For more information about this plan, you can contact Delegate Albo, May, or Rust.


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