Monday, Governor Timothy M. Kaine released details of his transportation plan and called for a special session of the General Assembly to address transportation on June 23. The Governor's plan fills our growing road and bridge maintenance deficit to promote safety, provides relief for regional transportation needs, and invests in innovative approaches to Virginia's transportation challenges. The plan raises over $1 billion annually by fiscal year 2012 and contains no gas tax increase.

"During the past several weeks I have talked to legislators, local elected officials, business leaders and other citizens about addressing our transportation problems," Governor Kaine said. "Today, based on those discussions, I am offering a plan that is simple, statewide and sustainable to address the growing shortfall in our maintenance needs and provides dedicated funds to address our statewide and regional transportation needs."

Consistent with past proposals, all funds that the Governor proposes for transportation will include a lockbox mechanism, specifying that the fund shall expire if it is used for any purpose other than transportation.

Safety First

Virginia currently faces a shortfall in highway maintenance funding, which drains money each year from dollars intended for road construction. Most of the highway maintenance funding goes to addressing safety issues - repair and operation of bridges, tunnels, traffic signals, and streetlights, as well as installation of guard rails and rumble strips, and plowing and paving the third largest highway system in the U.S.

Governor Kaine's proposal addresses the safety issues Virginians currently face by stabilizing the funds needed for highway maintenance. His proposal also frees up dollars for new investments in road construction that can help address the safety hazards in urban and rural areas.

To address the highway maintenance deficit, the Governor's plan:

  • Increases the existing statewide motor vehicles sales tax from 3% to 4% and dedicates all motor vehicle sales tax funds to maintenance;
  • Increases the statewide annual vehicle registration fee by $10 and dedicates those funds to maintenance.
  • Both of these increases were previously approved for regional purposes in HB 3202 by the 2007 General Assembly.

Regional Relief

To address traffic in the two most congested regions of the state - Northern Virginia and Hampton Roads - the Governor's plan invests in critical, targeted projects through new funds that are raised and invested in the regions. In addition, by correcting the maintenance deficit, the Governor's plan will increase local road construction funding statewide, restoring support for construction projects across the entire Commonwealth.

To address traffic congestion in Northern Virginia and Hampton Roads, the Governor's plan:

  • Increases the retail sales tax in both regions by 1% (does not apply to food or drugs);
  • Dedicates regional sales taxes to the Northern Virginia Transportation Authority, consistent with current law; and
  • Dedicates regional sales taxes to seven regional projects in Hampton Roads, including the Hampton Roads Bridge Tunnel, and abolishes the Hampton Roads Transportation Authority.

Governor Kaine is also proposing the abolition of the current local option income tax in both regions.

Transportation Change Fund

Virginia's transportation challenges range from severe congestion in areas like Northern Virginia and Hampton Roads to much-needed infrastructure to support economic development in rural parts of the state. While new construction can help relieve congestion, traffic challenges cannot be solved through road construction alone. And Virginia's transportation challenges are not just limited to traffic. Governor Kaine's plan recognizes the need for a change in our approach to transportation funding by creating a Transportation Change Fund.

The Governor's Transportation Change Fund will increase investment in transit, rail, and innovative solutions to reduce traffic congestion like teleworking and ridesharing. Three-quarters of the Transportation Change fund will be dedicated to transit and rail projects, increasing transit and rail investment by over 30 percent. The fund also makes dollars available for transportation projects to support economic development through aviation, port, and innovative highway investments.

To invest in the Transportation Change Fund, the Governor's plan:

  • Increases the statewide grantor's tax by 25 cents. The General Assembly previously approved a 40 cent grantors tax as part of the regional package in HB 3202.

"I look forward to working with both parties in the Senate and House of Delegates to address the serious transportation challenges and opportunities we face," Governor Kaine said.

More information on the Governor's transportation plan can be found at www.transportation.virginia.gov.