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B-3202

 H

Changes in State and Local Transportation Funding 

Dear Friends,

I hope you will take the time to read this entire message and then send me your thoughts.

In a Special Session of the General Assembly March 28 Governor Kaine offered his amendments to the controversial transportation funding package that had been working its way through both houses. On April 4, both houses adopted the amended bill and the Governor signed this bill into law.

This bill has four major components:

• A Statewide revenue stream
• A $3 billion dollar bond issue to be used almost exclusively for transportation funding
• A Northern Virginia Authority package
• A Hampton Roads Authority package

For the first time this allows a both the Northern Virginia region and localities the ability to raise and spend our own money on local transportation projects. The extent of the HB 3202 is far-reaching and is full of detail. A complete copy of the amended bill can be found at: http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+HB3202ER2. However I would like to summarize the bill and further ask for your input on some important decisions that eventually must be addressed locally.

The Northern Virginia Transportation Authority (NVTA) was created by the General Assembly in 2001 to administer the expected revenues raised by a sales tax increase put on the 2002 ballot. When this tax increase failed the NVTA was left with primarily a planning role. A product of this Authority was the 2030 Plan designating long-term transportation goals. Membership on the Authority is made up of mayors and chairs of all Northern Virginia cities and counties with two members the House of Delegates, one member of the State Senate and two citizen appointments – one from the Commonwealth Transportation Board. As Board of Supervisors Chairman, I represent Loudoun County on the NVTA.

In addition to new sources of funding HB 3202 makes some significant land-use changes. The most significant new change is to require the creation of Urban Development Areas (UDA) and allow Urban Transportation Service Districts (UTSD). The new law allows also for imposition of two kinds of Impact Fees throughout the county. The transportation impact fees will allow the County to adopt an ordinance to require all new development to help pay for transportation infrastructure. With over half of Loudoun still not developed this new provision allows us to collect transportation impact fees anywhere within the county to include “by-right” development – an area where we could not previously get a developer to pay for infrastructure costs when no rezoning was required. This is a very valuable tool to help combat sprawl and relieve traffic congestion. The second impact fee authority in the legislation is not quite as useful because in order to use it, the County would have to take over maintenance of all roads in the Urban Transportation Service Districts.

HB 3202 now allows some taxes and fees to be raised and administered by NVTA and others to be raised and administered at the county’s discretion. The rules constituting a “majority” for any vote by the NVTA is carefully written to prevent any one county or interest from gaining a simple majority. Any new fee or tax imposed by the Authority would need approval of the Board of Supervisors or City Councils of at least six of nine localities and the final funding vote must represent at least two-thirds of the population of the region. The localities in Northern Virginia are the Counties of Fairfax, Loudoun, Arlington and Prince William and the Cities of Alexandria, Falls Church, Fairfax, Manassas and Manassas Park.

By instituting new fees and taxes the total estimated region-wide revenues could amount to some $324 million dollars annually with as much as $35 million of that to be used in Loudoun County. The new law clearly states that the Authority must use “all revenues deposited to the credit of the Authority for projects benefitting the localities embraced by the Authority… with each localities total long-term benefits being approximately equal to the total of the fees and taxes” generated from that locality. It should be stressed that at this point the NVTA has approved NO new taxes or fees. However the law is written to allow NVTA to possibly levy new fees and taxes on the following:

• A 2% motor vehicle rental tax – raising an estimated $8.6 million/ $2.9 million for Loudoun County
• 2% lodging tax (TOT) - $23.2 million/$1.6 million for Loudoun County
• 1% initial vehicle registration fee $62.8 million/$2.1 million for Loudoun County
• 5% sales tax on auto repairs- $33.2 million/$0.5 million for Loudoun County
• A $10 vehicle safety inspection fee - $16.2 million/ $2.1 million for Loudoun County
• A $10 annual vehicle registration fee - $17 million/$0.5 million for Loudoun County
• A 40-cent Grantor’s, tax paid by the seller of a home, $163.6 million/ $24.8 million for Loudoun County

NVTA is also given the “menu” option of adopting all, some or none of the proposed fees and taxes unlike the Hampton Roads package which is “all or none.”

Localities, such as Loudoun County may also raise transportation money themselves. Our options include:

o       A surtax on commercial and industrial property up to a maximum of 25 cents per $100 value. If the full amount were levied it could return $12 million per year.

o        Impact fees on new construction in the County to be used specifically for transportation needs. A one-time Impact fees of as much as $10,000 per new rooftop and could generate an estimated $4 to $6 million dollars per year.

o       A local vehicle registration of $10 per year would raise an additional $500,000 annually.

We all suffer ever-worsening traffic and while not perfect, HB 3202 gives us an opportunity to provide some relief. However, what is important now is to hear from you as to your thoughts! While I could ask the Board to hold a Public Hearing, which can be tough for many to attend given busy schedules, I thought I would send this out VIA e-mail so you could comment at your convenience. Thank you for taking the time to read this; I look forward to hearing from you.

Sincerely,

Scott K. York
Chairman – Loudoun County Board of Supervisors

703-777-0204