By Amanda Iacone

Virginia Statehouse News

A bill from Delegate Tom Rust, R-Herndon, calling for the use of sales tax revenue to pay for transportation projects in Tidewater and Northern Virginia was under attack this week and effectively died when its counterpart failed to clear a Senate committee.

The proposal, which would have committed a portion of the state’s sales tax to transportation needs in Hampton Roads and Northern Virginia, was killed in the Senate Finance Committee on Tuesday.

During the past week, three different groups criticized the proposal, saying it would take tax revenue from the general fund and that it provided no long-term funding solution to the state’s transportation needs.

The Virginia Interfaith Center, the Commonwealth Institute and the Coalition for Smarter Growth all said the proposal would shift funding away from other core services.

“We’re not providing a sustainable approach to the future,” said Stewart Schwartz, executive director of the growth coalition.

Redirecting general fund dollars for transportation shortchanges funding for core government services, he said.

The combined $150 million that would have been diverted to Hampton Roads and northern Virginia would barely pay for an interchange, but it would pay the salaries for thousands of teachers and police officers, Doug Smith, president and chief executive officer of the Virginia Interfaith Center, said in a written statement.

State officials estimate that $1 billion more a year is needed to maintain and pay for the state’s transportation projects.

Gov. Bob McDonnell has proposed borrowing up to $3 billion to pay for about 900 transportation and transit projects. The House Appropriations Committee approved the spending package on Monday, and the Senate Finance Committee gave that portion of the governor’s plan a nod on Tuesday.

Michael Cassidy, president and chief executive officer of the Commonwealth Institute for Fiscal Analysis, called Rust’s plan a budget gimmick that does not provide a real solution.

But Rust, a Herndon Republican, shot back that the move is “critical” to northern Virginia and Hampton Roads.

“It’s a permanent reallocation of a small portion of the sales tax,” he said. ”If we don’t get some additional funds for those two areas, then we’re going to suffer economically.”

Rust said he has heard from businesses that they will leave if the congestion isn’t reduced in Northern Virginia, because their employees have difficulty getting to work. A reduction in the region’s tax base would hurt the rest of the state, because northern Virginia provides a large portion of state tax revenue, he said.

And the Defense Department, the major employer in Hampton Roads, has said it will not open any new installations in the region because of the traffic, said Sen. Jeffrey McWaters, R-Virginia Beach.

McWaters sponsored the Senate version of the bill on behalf of the governor. He said tapping a portion of the sales tax would have provided a dedicated revenue stream for Hampton Roads transportation.

He said the state could find areas to tighten in programs and departments to make up for the lost revenue without hurting essential services like education. He said that his proposal would shift just a small portion of the state’s $30 billion general fund.

The state’s general fund pays for social services and salaries and wages to state employees, among other things.