Surprise Inclusion of No.Va. in State Trans. Tax Plan Compels Dealers and Others to Look at Cost/Benefits After-the-Fact
Governor Timothy M. Kaineês pop changes to the Transportation Tax Bill the Virginia General Assembly passed and sent to him to sign into law took many by surprise, when the measure radically shifted direction with the addition of Northern Virginia to legislation intended solely for the Hampton Roads Transportation District. The governorês surprise move a week and a half ago wasnêt the least bit tempered when last week the General Assembly overwhelming accepted the amended legislation, with the inclusion of Northern Virginia. The rationale proffered for the unexpected expansion of this regional measure was that Northern Virginia, like Hampton Roads, has far more extensive transportation volume that makes these two regions alike, but different from other areas.
The transportation plan with amendments had widespread support among elected officials at the state and local level in Northern Virginia. Generally, NoVaês business community was on board with the regionês inclusion in the plan. But pivotal business sectors, including home builders, commercial realtors, and automobile dealers, were and remain apprehensive about what they perceive as disproportionate tax burdens imposed on them by a public policy formulation process in which they had no say.
Reactions like taxation without representation, and Northern Virginia getting a bad reputation among consumers as an expensive place to do business were vetted by dealers on conference calls VADA and WANADA held, respectively, over the past two weeks. Indeed, the transportation tax package components for dealers, proposing things like an unprecedented sales tax on vehicle repairs, including body work, that could make NoVaês vehicle repair business less competitive, not only with shops in nearby DC, and Maryland, but also other Virginia repair shops just over the county line. The increase in the vehicle title tax from 3% to 4% for Northern Virginia poses another set of issues for dealers who will be faced with trying to keep tax rates straight for customers on a locality by locality basis.
The $1.1 billion for transportation that these taxes promise to raise is a lot of money. But will these regional funding measures really relieve flagging highway systems in traffic congested areas? Or will the funding still be inadequate and/or be directed more to mass transit?
These are issues that dealers and other businesses will be grappling with in the wake of this new law. Northern Virginia consumers, too, could well have issues about paying more for their goods and services that fellow Virginians outside the region wonêt be paying.
The Northern Virginia Transportation District, comprised of a dozen or so state and local officials, can choose to adopt all, some or none of the tax measures fashioned by the General Assembly and refashioned by the governor as soon as July of this year. Actual tax implementation, while likely to be months in the making, could occur by the end of this year. Short of emergency legislation, strategies to relieve tax funding hardships canêt be addressed to the General Assembly again until the next legislative session in 2008. In the interim, Northern Virginia Transportation District officials may be approached about regional issues. In the weeks and months ahead, WANADA, in conjunction with VADA, will be looking closely at the overall and specific costs and benefits of the transportation initiative as enacted, and what might be needed to properly and fairly balance the equities for dealers.
All will be kept advised.
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