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McDonnell Amends Two-Tier Tax System In Virginia Transportation Bill

Governor also proposes slashing hybrid tax

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Virginia Gov. Bob McDonnell has offered a compromise, after Attorney General Ken Cuccinelli raised concerns about a provision that would have levied higher taxes against specific areas of the Commonwealth, including Northern Virginia.

The bill members of the General Assembly sent to the Governor's Mansion had a long list of localities from Northern Virginia and Hampton Roads that would have been subject to a higher sales tax rate. The two-tier tax system was intended to raise money for road building, but Cuccinelli said it may have been unconstitutional.

Now the governor has a fix: ditch the parts about the two urban areas and extend the taxing authority to the entire state. McDonnell is sending an amendment back to the General Assembly that would create regional taxing authority to all 21 of the commonwealth's regional planning districts — two of which are Northern Virginia and Hampton Roads.

That means the other 19 districts could create taxing authorities for transportation dollars if they wanted to.

University of Virginia analyst Kyle Kondik says the compromise is a risk for the governor.

"He wanted a legacy item, and that was more important to him than perfectly pleasing his own base," Kondik says.

The governor's amendments also cut the controversial $100 fee on hybrid cars to $64 a year.

"It was a step in the right direction to see that he was willing to reduce the tax," says State Senator Adam Ebbin. " However, we don't think it goes far enough, and we are pledged to introduce a bill next year to actually reduce the tax."

McDonnell's 52 amendments will be considered by the General Assembly in a veto session April 3.

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