Sales taxes across Northern Virginia rise to 6 percent Monday, thanks to the state’s new transportation bill. But the new law also lowers gasoline taxes by about a third and promises faster commute times – eventually.
That’s because Northern Virginia’s transportation coffers are expected to swell by $1.9 billion over the next six years with new money to be used for road projects aimed at relieving congestion in Prince William County and across the region.
Money for Northern Virginia road projects will be allocated through the Northern Virginia Transportation Authority, a planning board established by the Virginia General Assembly in 2002 to better coordinate regional transportation efforts.
NVTA Chairman Marty Nohe, who also represents the Coles District on the Prince William Board of Supervisors, said the NVTA is selecting projects based on their potential to achieve “rapid congestion relief” at costs that will work within the region’s budget, which is expected to be about $190 million this year.
“We had to look at projects that [are] big enough in scope to have a big impact but that were small enough in scope that we could take them on,” Nohe said during a recent NVTA public hearing in Manassas. “The biggest and most important projects are not on the list.”
In other words, don’t expect the money from the new transportation bill to be enough to widen Interstate 66, for example. But Nohe said the NVTA will be working on a six-year plan for road projects that could leverage multiple funding sources, including bonds and federal money, for some larger projects.
According to the law’s mandates, about 70 percent of the new money will be used for regional projects while individual localities will split the remaining 30 percent. The NVTA is still working to finalize regional projects for the first year’s revenue and will hold a final public hearing in Fairfax July 24.
Prince William County supervisors have already approved a list of projects slated for funding this year, which include:
- Widening U.S. 1 from four lanes to six lanes in Woodbridge from Featherstone Road (near Featherstone Shopping Center) to Mary’s Way (near St. Thomas Aquinas School).
- Widening Route 28 from two lanes to four lanes in Nokesville between Linton Hall Road (near Harris Teeter) and Fitzwater Drive.
- A new Potomac and Rappahannock Transportation Commission commuter bus line from Gainesville to Washington, set to begin this fall.
- Design work for a second platform at the Virginia Railway Express Rippon Station in Woodbridge.
- Project development funds to extend VRE service to Gainesville-Haymarket.
- Additional VRE rail cars for the Manassas VRE line.
Gas taxes decrease, others going up
Triple-A Mid-Atlantic estimates that retail gas prices in Virginia will drop 6 cents per gallon this summer as a result of the new law, which eliminates the 17.5-cent per gallon tax on retail gas and instead levies a 3.5 percent tax on the wholesale price of regular gasoline and a 6 percent tax on diesel.
The wholesale gas taxes will be set twice a year based on the average prices of gasoline and diesel during a six-month period, according to the Virginia Department of Motor Vehicles.
But several other state taxes are going up to pay for the transportation bill.
Sales taxes are rising from 5 percent to 5.3 percent across the state. In localities judged to be most in need of congestion relief – Northern Virginia and Hampton Roads – sales taxes will increase an additional .7 percent – to 6 percent.
Sales taxes on food will not increase. For the purposes of the new taxes, Northern Virginia includes Prince William County but not Stafford.
How else will you pay more? Hybrid vehicle owners will pay an extra $64 in annual licensing fees to the DMV. Also on the rise: vending machine taxes, hotel taxes, commercial and industrial property taxes and recorded deed taxes in NoVA and Hampton Roads.
The law is also counting on federal revenue that would be paid to Virginia if Congress enacts the federal Marketplace Equity Act, which would allow states to collect out-of-state sales taxes. If that measure doesn’t become law by January 2015, Virginia’s wholesale gas tax will increase from 3.5 percent to 5.1 percent.
Among the most controversial of these tax changes is the hybrid tax, which critics say punish people for making environmentally responsible decisions. But Gov. Bob McDonnell (R) says the new hybrid fee “ensures that all drivers are contributing to Virginia's roadways,” according to a recent press release.