Virginia’s Transportation Plan Should Give Pause to Legislative Leaders

While Virginia Governor McDonnell’s plan to eliminate the state’s gas tax and replace it with a higher sales tax, fees, and taxing internet sales is getting quite a bit of buzz, in a letter to General Assembly leaders, Department of Legislative Services’ Budget Adviser Warren Deschenaux points out why the plan should give them pause.  As reported by the Washington Post:

In his letter, Deschenaux acknowledged that McDonnell’s plan is “certainly a conversation starter.” But he said several things should give Maryland lawmakers pause.

Among them: “Over one-third of the program is funded by revenues that do not now exist,” Deschenaux said.

He is referring to revenue that McDonnell hopes Congress will allow Virginia to collect in sales tax on Internet purchases. Federal legislation that would give states that authority has been bogged down on Capitol Hill.

Deschenaux noted that McDonnell’s plan also diverts $283 million from Virginia’s general fund to transportation programs, a move critics have said could hurt education and other priorities.

“In sum, while the Virginia plan appears to produce substantial revenues to address a critical need, our preliminary early analysis notes that it is based on wishful thinking, shifting of monies from the general fund and moving away from a user-based financing of transportation,” Deschenaux wrote.

An opinion piece in the Baltimore Sun, hopes the Virginia Governor’s bold move will encourage Governor O’Malley to push for much needed transportation revenues for Maryland.

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