Va. governor's transportation bill moves forward

Bob Lewis and Larry o'Dell, Associated Press

RICHMOND, Va. (AP) -- Virginia Gov. Bob McDonnell's transportation funding bill has cleared its first hurdles in the General Assembly, but it still has a long way to go.

The Senate Transportation Committee on Wednesday advanced the five-year, $3.1 billion funding package to the Finance Committee.

In the House Finance Committee, which clears tax and revenue legislation, more than a dozen transportation-related bills were either rolled into McDonnell's package or tabled, clearing the tracks in the overwhelmingly Republican House for the Republican governor's legacy legislative priority.

McDonnell's bill would eliminate the state's 17.5-cent per gallon gas tax and replace it with a sales tax increase of less than a penny on the dollar. It also imposes a $100 fee on fuel-stingy hybrid cars.

The tax on diesel fuel remains. And part of the funding scheme relies on Congress passing a law mandating state sales tax collections for online purchases.

Democratic Sen. Dave Marsden of Fairfax County questioned whether Virginians would really see a 17½-cent decrease in prices at the pump after the gas tax is eliminated.

And in a Senate Finance subcommittee, Senate Democratic Leader Dick Saslaw, who owned a chain of service stations, agreed that consumers will never see the full 17½ cent decrease per gallon, saying gasoline producers won't allow such a sharp disparity between rival markets across state lines.

The subcommittee was briefed on McDonnell's bill and several others intended to generate the additional $850 million to $1 billion the state needs to keep pace with highway maintenance and repair needs also got a hearing before a Senate Finance subcommittee on transportation. The panel will meet again over the next week to decide which to recommend to the full committee.

McDonnell's Secretary of Transportation, Sean Connaughton, said the administration believes competition will drive the price down.