Steve Burns
WMAL.com

RICHMOND – (WMAL) After previously telling reporters he’s “not a fan of tax increases,” Virginia Governor Terry McAuliffe is calling for just that in his bid to give Metro a constant, reliable stream of money that its leadership says is needed to keep the system running smoothly.

In his budget revealed Monday, McAuliffe is calling for tax hikes on hotel stays, real estate sales, and wholesale gasoline in Northern Virginia that would generate $65 million a year. However, those tax increases are contingent on Maryland and D.C. also implementing dedicated revenue sources, and those jurisdictions agreeing to disband Metro’s current Board of Directors and replacing it with a leaner Reform Board.

“Without that funding, Metro’s General Manager has said that he will need to cut service as of July 1 of next year,” McAuliffe told legislators at the introduction of his budget. “I’ve said time and time again, if you cut service, it will be a death spiral for the Metro system. People will not ride on the system if it’s just plain not reliable.”

McAuliffe, in trying to sell lawmakers on the tax hikes, pointed out that the same increases were approved by the General Assembly in 2013 before they were rolled back by then-Governor Bob McDonnell.

“It shouldn’t be a tough call given that the General Assembly has previously voted to approve that funding,” he said.

Some of the new funds would also be spread to other transit agencies around the state.

Specifically, those tax increases include putting a floor on the regional wholesale gas tax, raising the hotel tax from two percent to three percent, and bringing up the real estate transfer tax, or the grantor’s tax, from 15 cents to 25 cents per $100 of assessed value. The taxes would apply to member jurisdictions of the Northern Virginia Transportation Authority: Arlington, Fairfax, Prince William and Loudoun counties, and the cities of Alexandria, Falls Church, Fairfax, Manassas and Manassas Park.

The new taxes are dependent on the District and Maryland also finding their own dedicated funding mechanisms. McAuliffe flatly rejected a plan favored by the District to institute a region-wide once-cent-per-dollar sales tax, saying it would “disproportionately burden Virginians.” Maryland officials have also called into question the amount of money Metro has requested.

There are also sharp disagreements over the implementation of the Reform Board as recommended by a study done by former U.S. Transportation Secretary Ray LaHood. District officials like Mayor Muriel Bowser have stayed supportive of the current board, chaired by D.C. Councilmember Jack Evans. In Maryland, transportation officials aren’t sure the Reform Board can be put in place without adjusting Metro’s founding document, which could be a years-long process.

Metro officials have asked for an additional $500 million a year to keep the system safe and reliable into the future. It would prefer the money come from a constant, reliable source so it can be bonded against, allowing the agency to borrow more money. Presently, Metro is the only major transit system in the nation without a dedicated funding source, forcing officials to depend on the whims of local lawmakers in giving it money year after year.

McAuliffe had previously told reporters he did not like tax increases when asked where the dedicated money would come from.

“I have never been one in favor of tax increases…take that for what it’s worth,” he said.

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