A deal struck in Richmond on paying for roads, bridges and mass transit could give Gov. Martin O'Malley some political cover if he decides to move forward in Annapolis with his own version of a transportation revenue bill in the second half of this year's General Assembly session.
This weekend, Republican-controlled Virginia's legislature signed off on a conference committee's compromise on a transportation revenue package that includes tax increases as well as tax cuts -- but enough of the former to reach $850 million a year in added revenue.
O'Malley will be able to point to the fact that the transportation revenue package was originally proposed -- albeit in a different form -- by Virginia Gov. Bob McDonnell, a Republican and frequent political sparring partner on national television shows last year. On Sunday, O'Malley complimented McDonnell on winning approval of the package as the two men appeared on CBS' Face the Nation.
O'Malley has been under pressure from Senate President Thomas V. Miller, who has introduced a transportation revenue plan that in some ways resembles the Virginia plan, to put forward his own legislation.
Like the Senate president's plan, the Virginia compromise includes a sales tax on gasoline -- 3.5 cents compared with Miller's 3 cents. Unlike Miller's plan, it would eliminate the state's conventional per-gallon gas tax, which now stands at 17.5 cents.
The measure would initially cut taxation on gasoline by about a third while raising revenue from other sources and using some sales tax revenue that now goes to other purposes. But the plan includes a potential delayed whammy for motorists driving in Virginia: If Congress fails to approve Internet sales tax authority to the state by January 2015 -- by which time McDonnell will have left office -- the gas sales tax would jump to 5.1 percent. McDonnell had proposed the Internet tax as a source of revenue but lawmakers -- aware that Congress had shown little inclination to pass that legislation -- insisted on a backup plan.
The Virginia plan also gives authority to its most congested urban area -- Northern Virginia and Hampton Roads -- authority to impose additional local taxes on top of the statewide levies. Miller is proposing a county option to raise money for local transportation needs by piggybacking up to 5 cents on top of the statewide 23.5-cent-a-gallon gas tax, which has not been increased since 1992.
While he hasn't proposed a plan this year, O'Malley has signaled his preference for using the general sales tax as the primary vehicle for additional funding of transportation. The Virginia gives him something to point to by increasing the state sales tax from 5 percent to 5.3 percent and devoting the increase to transportation.
Maryland Republicans have said one of their main objections to any additional gas tax is that too much of the revenue would go to transportation projects such as the Baltimore Red Line and Washington suburban Purple Line. But the GOP leadership signed off on a deal that includes about $300 million for a major transit project -- the Silver Line to Dulles International Airport -- in a bid to win Northern Virginia support.
The Virginia legislation puts O'Malley and legislators under added pressure to pass a transportation funding measure because the Washington suburbs compete with Northern Virginia for businesses that value a robust transportation network.
Lon Anderson, government affairs director for AAA Mid-Atlantic, said McDonnell has chalked up a major accomplishment on infrastructure.
"If a Republican governor can raise revenue and pass his (plan) adding over $800 million-plus to transportation, what does that tell you about where a Democratic governor should be?" Anderson said.
Top members of the governor's, Miller's and House Speaker Michael E. Busch's staffs have been meeting to hammer out a consensus. The governor met recently with members of the Senate Democratic caucus, and legislative staff members say efforts are under way to arrange a similar meeting with House Democrats.
Copyright © 2015, CT Now