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2002-09-04 Warner won't rule out another raid on transportation sales tax revenues

Warner won't rule out

At a public appearance yesterday in Prince William County, Virginia Governor Mark R. Warner refused to rule out transferring from the state Transportation Trust Fund next year's revenues from the 1/2-penny sales tax that is already dedicated to transportation. This was in response to a question from Arthur G. Purves, president of the Fairfax County Taxpayers Alliance. The exchange occurred while Governor Warner was campaigning for a Northern Virginia sales tax increase that would also be dedicated to transportation.

In 1986, the General Assembly increased the state sales and use tax from 4 to 4 1/2 cents and dedicated the one-half-cent increase to the Transportation Trust Fund. However, to balance the current-year (FY2003) budget, the General Assembly and the Governor agreed to divert from the Transportation Trust Fund 80 percent ($317 million) of the sales and use tax revenues that had been dedicated to transportation. To avoid showing a decrease in transportation spending, the budget replaces the money by borrowing against future federal transportation subsidies.

See pages 104-105 of, Summary of the 2002­2004 Budget, April 25, 2002.

However, the current budget does leave the FY2004 dedicated transportation sales tax revenues in the Transportation Trust Fund. Given Northern Virginia's severe traffic congestion, Mr. Purves asked if the Governor would pledge to keep those revenues in the Transportation Trust Fund. Governor Warner, who is facing a newly-announced six percent reduction in forecast state revenues answered, "I am committed to balancing the budget."

Mr. Purves commented, "While the Governor is asking Northern Virginians to increase their sales taxes $140 million per year for transportation, he is then willing to take $300 million -- and perhaps more -- of already-dedicated sales tax revenues and transfer them out of the Transportation Trust Fund. Apparently one purpose of the Transportation Trust Fund is to bail out the rest of government during economic downturns. The reason we have crowded roads is because transportation is government's lowest priority."

Fairfax County Taxpayer Alliance analyses show that between 1979 and 2002, Virginia inflation-adjusted spending increased 100 percent per student for public schools, 40 percent per student for public colleges, and 60 percent per resident for welfare. However, inflation-adjusted spending per resident for transportation was the same in 2002 as it was in 1979. Visit and scroll down to "Virginia spending" on the home page.