Drop in state revenue may delay Va. transportation projects

Virginia’s plans to improve its transportation infrastructure may need to be put on hold as the coronavirus pandemic leads to state revenue falling dramatically.

According to a report released by Gov. Ralph Northam’s administration, revenue was down by $700 million in April compared to the same time a year ago.

“As a result, total general fund revenue collections fell 26.2 percent in April. This decrease is consistent with our anticipated revenue loss of approximately $1 billion for the last quarter of fiscal year 2020 related to the impacts from COVID-19,” Secretary of Finance Aubrey Layne wrote in the report.

Much of decrease was due to Northam delaying state income tax payments to give residents a financial break during the pandemic. Typically, Virginia residents have their taxes paid by May 1.

“That took a lot of the revenues that we would have gotten out of late April and put them into late May and early June,” said Secretary of Finance Aubrey Layne.

But some of the loss was attributed to a drop in vehicle sales.

Tax revenue generated from vehicle sales was down almost $37 million in April, compared with last year.

“Auto sales were going great. They have now stopped,” said Layne. “The question will be when they are going to rebound.”

Depending on when that happens, transportation improvements may need to be delayed as revenue from vehicle sales provides a significant source of transportation funding for Virginia.

Revenue from gas taxes also plays a significant role in funding transportation projects, and that has fallen during the pandemic as well. License fees also declined.

“Transportation and other items — we’re going to have to take a look at,” said Layne.

Before the pandemic hit, Northam and Democratic lawmakers made increased funding for roads, bridges and public transit a top priority.

The Virginia General Assembly agreed to increase the statewide gas tax by 5 cents a gallon for the next two years. In addition, lawmakers voted to expand to the rest of the state a regional gas tax of 7.6 cents a gallon that was already in place in Northern Virginia, the Interstate 81 corridor and the Hampton Roads.

That means the gas tax in some parts the state will go from about 16 cents a gallon to nearly 34 cents a gallon.

The first increase is set to take effect in July.

The Associated Press contributed to this report.

Nick Iannelli

Nick Iannelli can be heard covering developing and breaking news stories on WTOP.

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