2 Metro Tax Hikes Killed in VA House

Date: May 02, 2018


The regional funding deal for Metro is still intact, but two tax increases that would have generated some of the revenue have been nixed by lawmakers in the Virginia House.

The tax hikes in question were proposed by Gov. Ralph Northam and would have raised the levies on hotel stays and real estate transactions for Northern Virginians only. However, without these tax measures, funding for road and transportation projects in Northern Virginia are less secure. The real estate tax, otherwise known as the grantor’s tax, would have gone up by 5 cents per $100 of sales price. The hotel tax, or transient occupancy tax, would have gone from 2 percent up to 3 percent. Together, these would have generated about $30 million.

Overall, Virginia has pledged to devote $154 million per year in funding for Metro, and without the two tax increases, more of the money will come from state funds that are already earmarked for roads and other transportation projects. However, Gov. Northam wanted to limit the drain on these funds. In the end, Virginia’s funding package will be broken down as such: $30 million from state funds, $22 million from a wholesale gas tax hike, and $102 million from road improvement and transportation project funds.

Although the Virginia Senate approved the tax hikes 26-12, the House voted 50-48 against. Del. Timothy Hugo, sponsor of the original House bill to fund Metro, cheered the results, telling The Washington Post that his goal from the beginning was to fund Metro without raising new taxes.

Meanwhile, Maryland and Washington, D.C. are also moving forward with their shares of the funding deal. Maryland Gov. Larry Hogan has committed to signing legislation passed by the General Assembly that provides $167 million per year, and D.C. Mayor Muriel E. Bowser has signed a bill committing $178.5 million. However, the Washington, D.C. City Council has yet to approve some of the tax increases that will pay for this amount.

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