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Gas tax, tolls dead in tentative transportation deal

RICHMOND, Va. (WTVR) — Virginia lawmakers agreed on a long-awaited transportation deal Wednesday and will present the plan to the full General Assembly and Virginia Governor Bob McDonnell.

Highlights of the deal include:

  • No tolls added to Interstate 95
  • Elimination of the state gas tax
  • Creation of a wholesale gas tax imposed at 3.5 percent
  • Increase of state sales tax from 5 percent to 5.3 percent
  • Creation of $100 alternative fuel fee imposed on hybrid vehicle owners

“I think we have a compromise that will get Virginia’s long-term transportation deficit solved,” said Del. John O’Bannon (R) 73rd district. “At the end of the day, this will be good for everybody.”

O’Bannon helped craft the House and Senate compromise, which will generate about $800 billion in revenue.

The bill replaces the current gas tax with a wholesale gas tax, which would basically lower gas prices in the state seven cents.

However, to offset that revenue loss, the state sales tax would jump to 5.3 percent.

Senate Democrats seemed upset about a $100 user fee for hybrid car owners that was added to the bill.

There will also be an increase in general fund money contributed to state transportation projects, but the number is less than what Governor McDonnell original proposed.

“They are on the brink of doing something they haven’t been able to do for a couple of decades,” Dr. Bob Holsworth, CBS 6 political analyst, said. “We’ll just have to see if this holds over the next 24 hours.”

Holsworth said each party has its challenges with the plan. Senate Democrats are worried about General Fund dollars while Republicans could be criticized by conservative leaders for raising taxes.

Stay with CBS 6 News and WTVR.com for the latest developments on this story.