Central Virginia Authority legislation accelerates regional approach to transportation

February 11, 2020

HB 1541 (McQuinn) creates the Central Virginia Transportation Authority, composed of the Counties and Cities located in Planning District 15 (Goochland, Powhatan, Chesterfield/Colonial Heights, Henrico, Hanover, New Kent, Charles City, Richmond City). The authority will administer transportation funding generated through the imposition of an additional regional 0.7 percent sales and use tax and 2.1 percent wholesale gas tax. The 35 percent of funds retained by the Authority are to be used for transportation-related purposes benefiting the member localities, 15 percent shall be distributed to the Greater Richmond Transit Company (GRTC) for transit and mobility services, and 50 percent will be returned proportionately to the each member locality to improve local mobility. This authority follows similar authorities created in Northern Virginia and Hampton Roads. VACo spoke in support of this bill at the request of member Counties. The bill passed the House 66-32.

According to a report of the Senate Finance and Appropriations Committee’ Transportation Subcommittee, regional motor fuels taxes of 2.1 percent are currently imposed in Northern Virginia, Hampton Roads, and the I-81 corridor for dedicated transportation purposes in each region. This encompasses localities in eight of the 23 planning districts encompassing districts 3, 4, 5, 6, 7, 8, 9, and 23. Approximately 5.7 million Virginians live in these areas and revenues from these existing motor fuels taxes are assumed to generate $224 million in FY 2021.

In the Senate, SB 452 (Edwards) would impose an additional 7.6 cent per gallon wholesale gas tax and a diesel gas tax of 7.7 cents per gallon beginning on July 1, 2021, to any county or city outside of the existing regions where such a tax is currently imposed. The revenues from such taxes would be returned to the transportation district in which the revenues are generated via the construction district grant program. The bill originally was drafted to impose a 2.1 percent fuels tax similar to Northern Virginia, Hampton Roads, and the I-81 corridor. Finance Committee staff estimated that this would impact 3.3 million Virginians and yield approximately $120 million in transportation revenues.

It remains unclear how SB452 bill would impact the proposed regional revenue generating mechanisms proposed by HB1541 if both are enacted into law. Omnibus transportation legislation with state-wide impact proposed by the Northam Administration continues to make its way through the General Assembly and evolve. However, HB1541 and SB452 highlight a growing trend of regional funding sources being dedicated to regional transportation projects.

VACo Contact: Jeremy R. Bennett

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