Sen. A. Donald McEachin, D-Henrico, said one problem with Wagner's bill — as with Newman's proposal and the incoming House version — is its diversion of sales tax money from the general fund, which covers state services such as schools, health care and public safety, to cover the transportation's ever growing needs.
"All we did today was reiterate our position that the general fund needs to be protected and at the same time something meaningful needs to happen in terms of transportation," McEachin said.
The House bill directs a small but escalating share of the existing 5 percent sales tax — initially about $50 million a year — to transportation. Because it increases incrementally, however, Democrats note that by year five, it would total about $250 million.
Both Senate versions plus the House bill also rely on about $1 billion over five years in Virginia sales taxes collected from online and catalog sales, assuming that Congress will pass a federal law authorizing it. McEachin argues that the new sales tax revenue should be reserved for the general fund, and Republicans — including the governor — fundamentally reject the claim.
"We've had $450 million of surplus over the past three years I've been governor. The general fund has been growing at anywhere from $800 million to $1 billion a year. Does the senator say we can't afford another $50 million a year?" McDonnell told reporters Tuesday morning.
While Democrats say McDonnell's bill won't fly in the Senate, McDonnell was just as insistent that the sales tax remain the centerpiece of any new transportation finance reform bill.
"I prefer the sales tax to the gas tax because the gas tax is in a long-term decline," McDonnell said, noting greater automotive fuel efficiency and a trend of people to drive less as gasoline prices increase.
Senate Bill 1355: http://bit.ly/11o0pj6
House Bill 2313: http://bit.ly/Xl8blY
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