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The Virginia House of Delegates will vote this week on H.B. 1059, legislation introduced at the request of Dominion Virginia Power to allow the company to retain overearnings collected from consumers related to investments in new generation facilities.
H.B. 1059 would unfairly increase the profits of the power company at the expense of consumers and erode State Corporation Commission (SCC) authority to protect consumers in future cases. In Dominion Virginia Power’s 2013 rate case, the SCC held that through the current rates, Dominion is collecting about $280 million per year more than it needs to do its job and earn a fair (10 percent) profit. That totals more than a half a billion dollars over two years. H.B. 1059 is designed to allow the power company to keep some or all of that $560 million, which should be rightfully returned to consumers, and keep its rates in place until 2019. Worse yet, the legislation deteriorates the authority of the SCC to provide meaningful oversight of utility rates going forward. Members are encouraged to take a moment to send a message to the Northern Virginia delegation to the House of Delegates asking them to oppose H.B. 1059.
With Virginia residents set to vote on Nov. 5, Republican gubernatorial candidate Attorney General Ken Cuccinelli has publicly released his plan on transportation, just weeks ahead of Election Day. The plan consists of seven elements, some in alignment with AOBA’s policy positions and others in stark contrast. Two particular elements of the Attorney General’s plan have drawn attention. Cuccinelli first calls for the establishment of a congestion matrix database in the first six months of his administration. The database would be used to evaluate and prioritize road and transit projects using a system of equally weighted variables, to include population, volume of licensed drivers, volume of automobiles, volume of motor carriers, vehicle miles traveled, number of businesses, roadway incidents, response time, and infrastructure age and condition. The included variables would presumably favor projects in more densely populated areas of the state, most notably Northern Virginia. The suggestion has drawn criticism, however, from rural legislators who point out that the formula ignores projects intended to boost economic development. Cuccinelli additionally would “devolve” responsibility for transportation planning and construction to the local level. AOBA has opposed such a measure in the past since local governments are currently overwhelmingly reliant on real estate taxes as a source of revenue and devolving responsibility for additional services would only place additional strain on property owners.
When asked about the candidates’ perceived qualities such as honesty, empathy, experience and ability to perform the duties of the office, voters gave the nod to Cuccinelli. The polling also confirmed a few generally perceived notions about the race. A few highlights: McAuliffe carries Democrats by a margin of 92-1 and Cucinnelli carries Republicans by a margin of 90-6, while Independent voters are sharply divided (44-42 in favor of Cuccinelli); The candidates are roughly even among male voters, but women voters prefer McAuliffe 50-38; White voters prefer Cuccinelli 50-42, while black voters resoundingly support McAuliffe 74-7.
The report was issued two years ago in August of 2011, but is currently being revisited by the Planning Commission’s Environment Committee per a directive of the Board of Supervisors. A staff list of policy questions may be accessed by clicking here. AOBA members with development interests in Fairfax County, and the Tysons area in particular, are asked to review the staff policy questions and provide feedback to inform AOBA’s organizational response. Please direct comments and suggestions to Brian Gordon at firstname.lastname@example.org.
Additionally, the County’s Department of Public Works and Environmental Services (DPWES) has just released a draft Stormwater ordinance update. Draft text can be accessed by clicking here. Corresponding proposed changes to the County’s Public Facilities Manual can be accessed by clicking here. The draft ordinance was prepared in response to state regulations (pursuant to U.S. Environmental Protection Agency requirements) and designed to set parameters for local government reviews and inspections of general permits relating to Stormwater runoff from construction sites. AOBA staff is in the process of reviewing the proposed ordinance. Again, members with interests in Fairfax County are requested to share the draft ordinance language with your engineering departments and provide feedback to assist in the development of AOBA’s organizational response to the County. Again, please send comments and feedback to Brian Gordon at email@example.com.
The Northern Virginia Transportation Authority recently adopted the list of regional projects on which to move forward in the first year that it will be spending new, transportation-dedicated revenues authorized by the landmark transportation legislation adopted this year. The Authority, comprised primarily of local elected officials from various Northern Virginia jurisdictions, was constituted years ago to make such planning decisions, but basically has not had money with which to implement any plans. Thanks to the new law’s revenue stream, the Authority started receiving new tax dollars July 1, and is immediately turning its attention to putting them to work.
AOBA has joined other business organizations in providing feedback to the Authority. Having long supported a dedicated source of funding for regional transportation projects, AOBA is urging the Authority to ensure that those hard-fought and precious funds are spent wisely and responsibly. We have pointed to the driving tenets behind the initial formation of the Authority: to allow decisions on local transportation projects to be made by local decision-makers, rather than in Richmond, and to cut across jurisdictional boundaries and avoid parochialism by applying the funds mainly to projects of truly regional significance.
When the dust settled, the Authority had approved expenditures totaling $209 million for FY 2014. While some project selection criteria were applied to the proposed list of projects considered in this first round, there is clearly a need for more and stronger guidelines going forward-- certain projects made the cut this time, such as bus shelters, pedestrian walkways, and localized bus route improvements, that do not really live up to the measure of making a truly significant impact on the region’s transportation problems—which was the very purpose intended for the local funding streams. Click here to view a list, by jurisdiction, of projects considered and selected by the Authority for action in year one.
Looking to FY 2015, AOBA joined with members of the General Assembly in calling on the Authority to adopt additional criteria in determining future projects. Most notably, we felt that reduction in commute times should be an evaluation factor. In addition, we urged the Authority to move expeditiously to hire a professional staff to manage its day-to-day operations. To date, the work of the Authority has been carried on by transportation staff members from local governments, serving in a voluntary capacity. In order to perform the necessary analysis of projects, assist in selection and then oversee implementation, a dedicated staff is needed. In an initial response to this suggestion, the Authority voted to appoint former Fairfax City Mayor John Mason as its interim President.
In the first meaningful infusion of funding into the Commonwealth’s critical transportation infrastructure in nearly 30 years, the Virginia General Assembly passed a sweeping transportation funding plan. The statewide plan would generate approximately $454 million in new money next year, and $870 million per year when fully implemented beginning in 2018
Of perhaps the greatest significance to AOBA members in this deal is the freezing of the commercial and industrial tax rate cap at 12.5 cents in perpetuity. AOBA secured a reduction of the maximum rate to this level in previous Sessions. However, that cap was scheduled to sunset in 2015, after which time it would rise to 25 cents per $100 assessed value.
Moreover, AOBA successfully urged rejection of a provision in the original draft conference committee report which would have compelled all Northern Virginia jurisdictions to adopt the commercial real estate tax surcharge as a condition of receiving regional funding. Currently, only Arlington and Fairfax Counties have adopted the levy - Arlington at 12.5 cents and Fairfax at 11 cents. The original conference committee language would have meant that AOBA members with properties in every other Northern Virginia jurisdiction would see a property tax increase of 12.5 cents per $100 assessed value on all commercial buildings. AOBA lobbied conferees to support an alternative approach recommended by Alexandria Delegate Rob Krupicka that, instead of forcing the commercial property surtax on local governments, would only require that local governments put forward an "equivalent local effort," i.e., localities could provide matching funds from other revenue sources of their choice (e.g. other taxes, bonding/other investments in infrastructure improvement).
This legislation represents a significant victory for AOBA members on this and several other fronts.
Cobbled together from numerous funding sources in an effort to secure the necessary number of votes in each Chamber, the legislation consists of the following basic components:
• Eliminates the states current 17.5 cents per gallon gas tax and replaces it with a 3.5% tax on gas “at the rack” (at the wholesale level) and a 6% tax on diesel fuel.
• Raises the statewide sales tax from 5% to 5.3%
• Raises the titling tax on vehicles from 3% to 4.3%
• Charges a $100 registration fee on electric vehicles
• Dedicates a portion of any future proceeds from internet sales taxes (pending action by Congress) to transportation. (A trigger mechanism is also included in case Congress fails to act, which would replace such funds with an additional 1.6% on the gas tax.)
• Increases the portion of sales taxes statewide currently dedicated to transportation from 0.5% to 0.67%.
• Adopts an additional 0.7% regional sales tax in Northern Virginia to be dedicated to new transportation construction.
• Increases the existing grantor’s tax in Northern Virginia by 25 cents per $100 assessed value.
• Adds an additional 3% transient occupancy tax to hotel stays in Northern Virginia only.
This legislation more than closes the existing maintenance funding gap, whereby construction funds are currently being depleted at a rate of roughly $400-500 million per year to support maintenance needs in other areas of the state. Regional funds generated by way of the additional sales, grantor’s and transient occupancy tax levies would stay in Northern Virginia, with 70% going towards regional projects to be administered by the Northern Virginia Transportation Authority and 30% to be granted to local governments that meet established thresholds for infrastructure investment. The regional funding sources in Northern Virginia total approximately $350 million per year.