Gov. Bob McDonnell is proposing increasing the share of sales tax and budget surpluses that are dedicated to transportation revenues.
McDonnell unveiled seven recommendations to improve transportation in Virginia during the Governor’s Transportation Conference in Norfolk.
“Transportation and economic development and prosperity are inextricably linked,” McDonnell said. “Whether it’s the infrastructure needed to move people and goods, or certain transportation-related industries poised for major growth and job creation, we must continue to make progress in improving our transportation networks if Virginia is to remain economically competitive.
McDonnell has recommended increasing the portion of the sales tax from 0.5 percent to 0.75 percent over the next eight years. His plan would include increasing the sales tax to 0.55 percent in the next fiscal year, which would mean an additional $110 million for transportation maintenance. He also recommends using 75 percent of year-end budget surpluses for transportation.
McDonnell says he will continue to roll out new transportation initiatives over the next few weeks.
The five other recommendations introduced Thursday are:
• Authorizing the Commonwealth Transportation Board to implement a version of tax-increment financing. When the state funds a major new piece of transportation infrastructure, transportation should receive a portion of the growth in state tax revenues that result from economic development surrounding the project. These revenues will be reinvested in additional projects that can help spur additional development.
• Proposing that the first 1 percent in revenue growth over 5 percent each year be dedicated to transportation.
• Expanding VDOT’s Revenue Sharing Program to include maintenance. Currently, the state will match local money dollar-for-dollar on capital improvements within a locality. Enabling maintenance projects to be eligible for this program will help make our maintenance dollars go farther.
• Legislation to restructure and fund the Virginia Commercial Space Flight Authority and turn it into a true independent agency to develop the Mid-Atlantic Regional Spaceport into the number one commercial space flight facility in the nation.
• Legislation to promote the Port of Virginia by eliminating some of the bureaucratic processes with which the Virginia Port Authority must comply and creating the I-85 Connector Economic Development and Promotion Zone, wherein companies shipping goods through the port or engaged in maritime commerce can operate income tax free for their first two years in operation.
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