Va. Gov. McDonnell open to compromise on gas tax

McLEAN, Va. (AP) -- Virginia Gov. Bob McDonnell said Monday he's willing to compromise on his proposal to eliminate the state's gasoline tax — a key detail of his $3 billion transportation package — to get it through the state Senate.

At a news conference outside a toll plaza on the Dulles Toll Road, McDonnell said he would consider a plan that does not fully eliminate the state's 17 1/2 cents-per-gallon gas tax. If legislators want to phase out the gas tax over time, or leave a reduced gas tax in place, McDonnell said he would consider it.

"I haven't drawn any lines in the sand with the combination of sales and gas" taxes that could be acceptable in a transportation funding plan, McDonnell said.

McDonnell's proposal calls for abolishing the gas tax and replacing the money by increasing the sales tax from 5 to 5.8 percent. McDonnell says the tax swap would be revenue neutral at first but generate new money over time because the gas tax is declining as a revenue source and the sales tax is growing.

Senate Democrats have expressed concern about using sales tax revenue, which goes into the state's general fund, to pay for transportation. Opponents have said that using general fund revenue for transportation shifts money away from education and other state priorities.

While McDonnell expressed willingness to compromise on the gas tax, he said he will insist that any transportation package dedicate at least some general fund revenue to transportation, calling it "a core function of government."

He said a transportation package that doesn't include money from the general fund would require a massive tax increase that he won't support and that would be dead on arrival in the Republican-dominated House of Delegates.

McDonnell's trip to northern Virginia came a day before a Senate committee takes up McDonnell's plan, which has already passed the House of Delegates.

The Senate is evenly divided, with 20 Republicans and 20 Democrats, and picking up some Democratic support is crucial because some conservative Republicans oppose McDonnell's plan on the grounds that it will ultimately increase taxes.

McDonnell is hopeful of picking up support from some of the Democratic senators in the traffic-choked region, where the business community has endorsed McDonnell's plan.

Meanwhile in Richmond, senior House Republicans are acknowledging that any legislation that emerges from the Senate is certain to contain changes that would have to be resolved in a conference committee.

"I think what comes out of the conference committee will be somewhat different from what goes in," House Speaker Bill Howell said in Richmond Monday. "There could be a change, but it's not a question of the governor having to accept. The governor wants to see a good plan come out just as each of us do."

As recently as a week ago, transportation legislation was imperiled by a partisan rift in the Senate set off by an attempt by Republicans to take advantage of a Democratic senator's absence to redraw all 40 Senate districts to the GOP's advantage. Democrats pledged to fight back on any vote that requires the votes of 21 senators to pass.

That resentment was mitigated last week after Howell set aside the Senate Republican redistricting amendment, effectively killing it. The path was smoothed further when Senate Republicans and Democrats agreed on an expedited roadmap for Medicaid expansion in Virginia.

Senior Senate Democrats, including Democratic Leader Richard L. Saslaw, D-Fairfax, subsequently said prospects look good for negotiating a transportation package as long as the Republican House and McDonnell are amenable to some changes, including preserving some reliance on the gasoline tax.

McDonnell said Monday that he and Saslaw had exchanged letters over the weekend and that he was encouraged that a compromise can be reached.

At McDonnell's press conference in northern Virginia, the governor highlighted $300 million in his transportation package that would be dedicated to slowing the growth of tolls on the Dulles Toll Road. Rates on the busy highway, which connects Dulles International Airport to the Capital Beltway, have increased significantly in recent years, and are slated to go much higher in future years. That's because toll road revenue is a major source of paying for the $2.8 billion second phase of the Metrorail extension to the airport.

McDonnell said that if his plan passes, the money will be used to reduce future increases to the average one-way toll on the road by 50 cents each in 2015, 2016, and 2017. Without any new funds, officials project the one-way toll to drive from Dulles to the Beltway will increase to $6.75 by 2019. The cost is now $2.75, and officials have voted to raise it to $3.50 in 2014.

"If we're going to keep tolls low, then this bill has got to pass," McDonnell said.

___

Associated Press writer Bob Lewis contributed to this report from Richmond.