Increase In Virginia Grantor's Tax Shot Down

Governor Kaine's proposal to raise the statewide Grantor's Tax was shot down last week. Here's the press release from the Virginia Association of Realtors®:

"Virginians still awaiting a realistic solution to transportation woes

Virginia legislators' latest effort at a fiscal fix for transportation collapsed early last Thursday morning...at 1:39 a.m. to be exact.

After first defeating two statewide transportation bills, including one proposed by Governor Kaine (which included a statewide grantor tax), the House approved legislation financing projects in Hampton Roads and Northern Virginia only.

In the House, Kaine's proposal was defeated 98-0. House members used a sagging real estate market as a reason to vote against the proposed statewide grantor tax.

House Democrats voted against Kaine's plan because they preferred amending a plan put forth by Senator Richard Saslaw (D-Fairfax / Senate Majority Leader).

Saslaw's funding package included increases in the both the gas tax and the sales tax to bolster the statewide maintenance fund. In addition, the Saslaw package included provisions for regional funding in Northern Virginia and Hampton Roads.

In a procedural move, House Democrats stripped out the gas tax in hopes of having more success with a compromise. House Republicans, noting the current economic status, defeated the statewide package.

The House of Delegates did pass a measure to restore the funding of the regional packages that passed in 2007 and were struck down as unconstitutional by the Virginia Supreme Court in February of this year.

This proposal, drafted and patroned by Delegate Phil Hamilton (R-Newport News) and Delegate Dave Albo (R-Fairfax) was designed to fund transportation needs in Northern Virginia and Hampton Roads by dedicating a portion of future revenue growth from Virginia ports and Dulles and Reagan airports in Northern Virginia.

The bill was communicated to the Senate late Wednesday night. Early Thursday morning (12:15 am), the Senate Finance Committee voted to kill that bill.

The plan was criticized by Democrats in both the House and the Senate, who said it lacked a component to address the mounting deficit in the Commonwealth's highway maintenance budget...thereby crystallizing the major issue of the current transportation debate.
REALTOR® lobbyists, legislators and Governor Kaine will now focus their attention on the 2009 General Assembly session as the next round in this fight.

Beyond next spring, most political observers suggest that this could be the "issue du jour" for the 2009 election cycle, deciding the majority in the House of Delegates as well as outcomes in the statewide races for Governor, Lt. Governor and Attorney General.

REALTOR® lobbyists will continue to work with General Assembly leaders to identify fair, balanced and realistic solutions (NOT STATEWIDE RECORDATION OR GRANTOR TAXES!) to deal with transportation needs...now and into the future."