MANASSAS, Va. – A coalition of taxpayer groups is pressing the Virginia General Assembly to repeal the recently imposed sales tax increase when the legislature convenes in January.
The revenue from the higher sales tax and a series of fee increases are being used to finance a $4 billion transportation package, which includes funding for the construction of the Silver Line and toll reductions on the Dulles Toll Road.
But the National Taxpayers Union, Americans for Tax Reform and the Fairfax County Taxpayers Alliance say too much of the money is being used to fund mass transit like Metro’s new Silver Line. And they say the tax hike should be repealed.
They may find sympathy among some members of the General Assembly but House Speaker Bill Howell, R-Stafford, tells WTOP that any proposal for repeal is unlikely to go anywhere.
Delegate Tim Hugo, R-Fairfax, who voted against the transportation package because of the increased taxes, agrees with Howell’s assessment.
“Some are saying it’s okay with the transportation tradeoff, but I don’t think there will be the votes there to repeal it,” says Hugo.
But there will most likely be an attempt. Delegate Bob Marshall, R-Manassas, says he’s heard loud complaints from constituents since the higher retail sales tax took effect July 1.
The sales tax rose from 5 percent to 5.3 percent in most areas of the state but is now 6 percent in Northern Virginia and Hampton Roads.
“I got Obama Democrats saying they are going to vote for me because they are so mad about this,” says Marshall.
Also threatening the transportation package is a component that relies on millions of Virginia’s expected revenue from an online sales tax that Congress has yet to pass. Hugo says the lack of that revenue leaves a big hole.
Lawmakers anticipated the online sales tax revenue would generate almost $1 billion, new money that would go to transportation projects. Without it, lawmakers will have to decide whether to make up for the shortfall with state taxes.
“That could kick up the gas tax again,” Hugo says.
The retail gas tax was eliminated under the transportation reforms, replacing it instead with a 3.5 percent tax on the wholesale price of gas, effectively reducing the tax drivers pay at the pump even as they pay more taxes on clothes, television sets and office supplies.
The anti-tax groups say the increase in the sales tax should be replaced with additional public private partnerships like the one that constructed the high occupancy toll lanes now operating on the Capital Beltway in Virginia, better known as the 495 Express Lanes.