Virginia Faces More Transportation Woes

Date: September 20, 2017

How to pay for necessary improvements to the Metro transportation system has long been a concern for officials in Maryland, Virginia, and Washington, D.C., but now Virginia is grappling with how to raise revenue for its own transit maintenance needs.

WTOP reported that the state’s funding needs for bus and rail overhauls and replacement, as well as other transit projects, is roughly $2 billion between 2020 and 2027, or approximately $200 million per year. If these issues aren’t addressed, Virginia could face major traffic problems in the coming years.

To address the issue, the Transit Capital Revenue Advisory Board recommended the Virginia General Assembly pick from one of several tax increase packages. The options include:

  • Raising the statewide deed and mortgage recordation tax from $0.25 per $100 to $0.30 per $100 and increasing the real estate transfer tax from $0.05 per $100 to $0.10 per $100. Both of these increases would be dedicated to transit capital, as would a portion of priority transportation fund revenue, and this would generate an estimated $127 million per year through fiscal year 2027.
  • Raising the statewide sales tax rate for nonfood purchases from 5.3 percent to 5.4 percent, which would generate about $157 million per year.
  • Raising the statewide gas sales tax by 0.9 percent, which would generate about $154 million per year.
  • Raising the statewide deed and mortgage recordation tax and the real estate transfer tax by $0.02 per $100 each, dedicating a portion of priority transportation fund revenue to transit capital, and adding additional regional taxes in Northern Virginia and Hampton Roads. This would provide about $138 million per year.
  • Raising the statewide deed and mortgage recordation tax by $0.03 per $100 and the real estate transfer tax by $0.04 per $100, dedicating a portion of priority transportation fund revenue to transit capital, and adding additional regional taxes in Northern Virginia and Hampton Roads.

Related Content: Small Business News | Economy | Virginia

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