Virginia’s commitment to provide $154 million each year to repair the Metro transit system has not changed, but the sources of the money would, under amendments that Gov. Ralph Northam made to the legislation Monday.
Pushed by Northern Virginia localities worried about the loss of regional money for local transportation projects, Northam restored most of two proposed local tax hikes that had been stricken in a compromise between the Senate and House of Delegates in the waning hours of the General Assembly session.
The governor amended the two identical Metro funding bills to reduce by more than $30 million the amount of money that would come each year from transportation funds administered by the Northern Virginia Transportation Authority. He did so by restoring 10 cents per $100 in value to the grantor’s tax on deeds that the authority receives to pay for regional transportation projects.
Northam would replace that money by restoring a proposed increase in the lodging tax from 2 to 3 percent in the six jurisdictions that are part of the Washington Metropolitan Area Transit Authority, which runs Metro. He also would raise the grantor’s tax on deeds in those jurisdictions by 5 cents per $100 in value.
The dedication of $154 million annually to Metro marked a milestone for the Virginia legislature in establishing a funding source for long-term repairs and maintenance of the transit system. The state’s decision also helped prompt Maryland’s legislature to commit $167 million a year in its share of the Metro maintenance fund, which also will be borne by the District of Columbia.
But Northern Virginia localities were distressed by the way the assembly raised the money in the compromise adopted by a conference committee and approved by both chambers last month on the final day of the 60-day session.
Increases in the grantor’s tax on deeds and the transient occupancy tax for lodging had been part of the Senate version of the legislation, proposed by Senate Minority Leader Dick Saslaw, D-Fairfax, but they were eliminated in the compromise.
Instead, the legislature relied on existing pots of money generated by regional taxes in the sweeping transportation funding package adopted in 2013. Leaders of eight localities pleaded with Northam last month to restore some of the $108 million that would be taken each year from the authority’s transportation funds and used to help repair the Metro system.
Northern Virginia Transportation Authority Chairman Marty Nohe, a member of the Prince William Board of County Supervisors, told the governor the legislative deal “increases the funding burden on Northern Virginia taxpayers, who already provide extensive funding for transportation projects and services, including Metro.”
S&P Global Ratings, one of three national bond-rating agencies, acknowledged that the legislative compromise would diminish the money available to cover debt from bonds issued by the authority, but said the region still had ample debt coverage because of the region’s strong economy. But S&P also warned of the precedent the assembly had set by reducing “previously dedicated revenues that had been pledged to bond repayment.”