General Assembly Update January 24, 2022

A full week into the 2022 Legislative Session, Virginia has a new Governor, a new leader in the House of Delegates and discussions on taxes that help fund Virginia’s transportation projects has begun in the General Assembly building. Due to all the speeches of outgoing and incoming leaders, the first week of the Legislative Session has been a bit slow – but it will pick up in a hurry.

VTCA is laser focused on key issues to the transportation industry: Our mission is to fight to protect and grow transportation funding. VTCA serves as Virginia’s voice for long term, sustainable transportation investment – the economic engine of Virginia’s prosperity.

The good news: the state’s funding coffer is full of tax revenue. The worrisome news: Governor Youngkin wants to give some of that revenue back to voters by cutting the grocery tax and freezing the gas tax. Prior to any action on the Governor’s proposed gas tax freeze and grocery tax cut, the Commonwealth Transportation Board’s (CTB) 6-year finance plan was revised with a significant increase: from $47 Billion to $53 Billion. This is due to Virginia’s significant sales tax revenue, the planned gas tax increase, and the federal funding infusion (about $300 Million per year in new federal revenue). VDOT staff feel confident in these numbers over the next six years.

VTCA will make the case to legislators the impacts of proposed cuts to the gas tax and grocery tax on transportation funding. Ultimately, a significant loss of transportation funding means detrimental project delays. Factors to consider are:

• The economy is in a tough spot. Inflation is way up. Fuel is up 41% from last year, used cars are up 40%, groceries prices are high, and all commodities are 18% above where they were last year. Economists estimate these prices are here for at least 8 to 12 months.
• The 1-year 5 cent gas tax cut will result in a 250 million loss in transportation funding. If passed, will the legislature want to come back again and repeat the cut  Studies show the consumer sees only a third of a benefit from a gas tax cut while gas prices fluctuate regularly.
• The Grocery Tax will cut transportation funding by about 130 million each year or until the legislature reinstates it. An unlikely scenario.
• There is a lot of funding going toward multi-mobile transportation and trails. Some of that funding this year, may get re-allocated to other transportation areas. JLARC, the Legislatures research arm studied VDOT’s funding and recommend VDOT look at increased maintenance of city roads as well as secondary roads.

VTCA is also pursuing funding for Workforce Development this year. We will support the Virginia Infrastructure Academy (VIA) which has been launched in cooperation with the Virginia Community College System and other trade associations. VTCA is on the VIA Advisory Board. The goal is to train and place workers in jobs – 4,000 people per year over the next four years focusing on: CDL, heavy equipment operations, diesel mechanics and welding among other needs like surveying.

VTCA will again attempt to advance guidelines around Project Labor Agreements (PLAs). It is clear for now, that Governor Youngkin is not supportive of PLAs on public projects, but several localities are advancing local employee collective bargaining efforts. Virginia is one of the few states that allows PLAs but has no guidelines addressing when and where PLA’s provide public benefit. It may be difficult to get this bill out of the Senate in 2022.

You can find a complete list of bills we are monitoring on your behalf HERE. If you have questions, please let us know.