Tax increase favored for Va. transit shortfall

WASHINGTON — Money keeping Virginia’s transit systems from falling apart is set to drop by more than 40 percent over the next three years, and a state panel is preparing to recommend increasing the regional gas tax or other taxes to close the gap.

“By 2020, we are not going to be able to continue to meet just the state of good repair needs for what we have today, not even talking about new capacity at all,” said Jennifer Mitchell, director of the Virginia Department of Rail & Public Transportation.

It could have a big impact in Northern Virginia, where the state spends more than 90 percent of its transit capital money.

The department’s Transit Capital Project Revenue Advisory Board met earlier this month, and DRPT Chief Financial Officer Steve Pittard told the Commonwealth Transportation Board that the panel agreed on the need to focus on new funding for transit capital projects.

“We had strong feedback that it should include regional options, including the regional gas tax,” he said.

The money would fill the gap left by capital revenue bonds, which the state can no longer issue because it will soon hit a cap under state law.

The bonds are backed by smaller insurance premiums that could close some of the hole.

The outlines of final recommendations are expected by June, but the General Assembly would have to act in order for any tax changes to actually become reality.

“The political will is going to be the critical point,” said Commonwealth Transportation Board member Marty Williams, who also chairs the revenue advisory board.

“The report … is not going to tell the legislature, ‘You need to raise all these taxes and get off your duff and fund these things.’ … We recognize the fact that the discretion is in the legislature,” Williams said.

The panel is clear that any tax increases should be in areas related to transportation.

“I know it’s going to be a tough sell at the General Assembly, but our job is to show them where the money could come from, what’s the most consistent revenue source, what could you depend on year to year,” Williams said.

“This $110 million hole is a huge wakeup call. … If we don’t fill that, we can’t even maintain what we’re doing now,” he added.

The funding shortfall could be even larger if Federal Transit Administration support for the state slips from what has been relatively consistent levels.

The forecast conservatively accounts for the possibility that the federal government’s special $150 million-per-year, 10-year capital contribution to Metro is not renewed by the Republican-led Congress.

With the election in November, a new governor will take office in January just before the General Assembly convenes, and Williams frames transit upkeep as an economic issue for Gov. Terry McAuliffe’s successor.

“And if anybody running for governor or office out there is talking about jobs and talking about economic development in Virginia, you have your head in the sand if you don’t think any of these companies, especially now — even more so now than ever – are looking in areas to locate that don’t have transit options,” Williams said.

“There’s a lot of things up in the air,” Virginia Transportation Secretary Aubrey Layne said.

“It’s going to be a big decision for the commonwealth, and the new governor is going to have to deal with transit, and primarily WMATA, but this is going to be key as to how that problem is solved from the commonwealth’s perspective because of our funding needs.”

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