Car insurance taxes to help fund masive Virginia transit plan

Virginia Gov. Timothy M. Kaine has proposed $3 billion in borrowing for transportation projects, one-fifth more than Republican legislators sought, using existing taxes on car insurance premiums to pay off debt.

Kaine, a Democrat, also left intact regional transportation provisions for the state’s most populous and gridlocked regions — northern Virginia and Hampton Roads — allowing them to generate up to about $440 million and $215 million, respectively.

His amendments to the transportation funding also reduce the burden on localities and give local leaders in those regions with options for tax and fee increases.

Counting the more than $500 million the statewide plan would provide annually and if all the local taxes are enacted in the regional plans, Kaine’s amendments could yield about the same $1.2 billion annual total for transportation that the GOP plan projected.

Republicans, who dominate the House and Senate, expressed guarded support for Kaine’s amendments. “The (Republican) caucus certainly reserves the right to look at it, but the general tenets, I think, are very good. The big stuff looks very good,” said Del. M. Kirkland Cox, R-Colonial Heights, who delivered the GOP response.

Sen. Kenneth W. Stolle, R-Virginia Beach, said Kaine can count on broad GOP support in the Senate as well. “We are hopeful we can garner broad support among the Republican Caucus and the entire Senate,” he said.

With all 140 seats in the House and Senate up for election in November and Democrats sensing an opportunity to overtake the GOP majority, the transportation issue dominated the 2007 legislature.

Kaine’s most conspicuous change to transportation funding boosts borrowing from the $2.5 billion through 2016 in the plan as it passed the General Assembly to $3 billion.

Kaine’s amendments call for repaying the debt using about $150 million a year from one-third of the existing tax on automobile insurance premiums. He said it was a much more reliable source of revenue for repaying bonds than the tax paid to record deeds, wills and lawsuits that the GOP plan pledged for debt repayment.

Lawmakers already had agreed to earmark that source of money for transportation.

“We do have an experience, though, in knowing how much those auto insurance premiums produce,” Kaine said at a news conference. “We could look at the past 20 years of that and easily do a projection for what they’ll produce in the next 10 or 15 years.”

Topics Auto Virginia