Virginia Lawmakers Will Consider Dedicated Metro Funding Plan

Date: January 31, 2018

Related Content: News Economy Virginia


Before former Gov. Terry McAuliffe left office, he introduced his proposal for dedicated Metro funding, an effort that is expected to consider under Gov. Ralph Northam. The next hurdle, however, is approval from the General Assembly—as well as from the District of Columbia and Maryland.

Under McAuliffe’s plan, The Washington Post reported, Northern Virginians would see three tax increases. One is the real estate transfer tax (or grantor’s tax), which would rise from 10 cents to 25 cents per $100 of assessed value. The second is the hotel tax (or transient occupancy tax), which would increase to 3 percent from 2 percent. The last is applying the minimum state wholesale gas tax to the regional rates, which are currently separate and which would add 2 cents per gallon to the cost of gas. This change would also apply to Hampton Roads. To get buy-in from the rest of the state, the plan would also allow bonds to be issued that would total $110 million per year to bridge a coming gap in state transit funding.

The revenue from the three Northern Virginia tax hikes is expected to total $65 million annually, and that plus the $85 million earmarked from Northern Virginia transportation funds, would represent Virginia’s share of the dedicated funds Metro says it needs; the remaining $350 million would need to be provided by Maryland and D.C. McAuliffe’s plan is contingent upon the other two regional partners committing their share of dedicated funding, and the other condition is that the 16-member Metro board be replaced by a short-term, five-person reform board.

The plan is expected to face a challenge in the Legislature, however similar tax increases were approved in the past in the process of passing the 2013 transportation plan.

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