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RICHMOND--Gov. Tim Kaine said yesterday he would advocate for an increase in the sales tax on vehicles to make up money lost if lawmakers repeal the abusive driver fees.
Speaking to reporters, Kaine said he thinks charging a 5 percent sales tax on vehicle sales, rather than the current 3 percent, is the best way to provide more money for road maintenance.
"If we're serious about transportation funding, why have a lower sales tax on automobiles?" he said. "That just remains a very rational place to go for maintenance dollars."
However, House Speaker Bill Howell, R-Stafford, disagrees.
"The car industry is in one of the deepest recessions," Howell said. He called this "the absolute worst time [to increase the sales tax on cars] because that's a significant tax."
Kaine's comments come as lawmakers start considering repealing the "abuser fees"--a fee levied on those who get reckless driving tickets, DUIs and other traffic tickets. The fees were part of last year's transportation package, and were expected to raise about $65 million for roads.
But public outcry against them has been enormous, in part because they apply only to Virginia drivers, and because they were being applied to traffic offenses much less egregious than what lawmakers had in mind. Legislators began backpedaling last fall, and now that the session has begun there are a slew of bills to repeal the fees.
Kaine, who had earlier advocated revising the fees, surprised many last week when he, too, advocated outright repeal of them.
Repealing the fees--while perhaps keeping them for DUI or serious, repeat reckless driving--seems to not be a very contentious topic. What is contentious, however, is how--or whether--to provide money to make up for any lost revenue from the fees.
Kaine said raising the sales tax on cars--which is technically removing an exemption--would generate about $220 million per 1 percent of tax. He'd like that money to go to road maintenance, which keeps costing more money than is budgeted to pay for it.
However, he isn't proposing actual legislation to do so; Kaine made such a proposal for the past two years, and it never got out of committee in the House of Delegates.
Some Democrats have proposed a different tax to pay for maintenance and road improvements--an increase in the gas tax.
Like Kaine's sales tax on cars, gas tax increases have gotten nowhere in the House of Delegates during the past two years of drawn-out transportation funding battles.
Bills have been filed in both chambers that would raise the gas tax anywhere from 1 to 2 cents a gallon to 10 cents a gallon.
Kaine said he prefers his car sales tax proposal, but he wouldn't rule out a gas tax.
"There are all kinds of proposals floating around," he said. "I'm going to work with them in a consensus fashion."
But there isn't a consensus on that, even within the Democratic caucus.
Sen. Edd Houck, D-Spotsylvania--who filed the first bill to repeal the abuser fees on the Senate side--said he's open to options, but he's not sure lawmakers need to replace the money that would be lost by repealing the abuser fees.
"I'm not convinced that we've lost that much money," he said.
Houck thinks it's best to separate the issues of the abuser fees, and tax increases, and his bill does not mention a tax increase.
And, he said, it's a lack of consensus that has kept Senate Democrats from doing anything more than vaguely hinting at a transportation proposal to come.
Howell said a gas tax, like Kaine's car sales tax, would be "a tough sell" to the tax-averse House Republicans.
"That has a huge impact on those who can least afford it," Howell said.
And he, like Houck, isn't convinced that lawmakers need to make up for any revenue that would be lost by repealing the abuser fees. Howell noted that the fees made up a small portion of the overall transportation package last year, and he thinks the money lost by repealing them could be made up elsewhere, without a tax increase.
Chelyen Davis: 804/782-9362