Charlottesville Tomorrow Blog

VA Supreme Court decision limits taxing authority for transportation

The Virginia Supreme Court has ruled that the General  Assembly overstepped its constitutional authority when it gave the Northern Virginia Transportation Authority (NVTA) the power to raise taxes to fund transportation projects.

NVTA was given the power to levy fees and taxes as part of 2007’s landmark transportation legislation, HB 3202. One of the other major elements of the bill, raising hundreds of millions of dollars through abusive driving fees, will be overturned this year by the General Assembly itself after significant public outcry. That puts the ball back in the court of state and local governments as they continue to search for ways to raise additional funding for road and transit projects. Last week, VDOT’s CFO announced that road construction funds will be down as much as 44% over the next six years.

Under the enabling legislation, NVTA gained the power to impose seven regional taxes and fees, including additional licensing fees and a local sales tax, effective the first of this year. Based on that, the Authority passed a resolution authorizing the sale of $130 million in bonds which would be paid down through the tax revenue.

The court case originated when the Authority sought confirmation from the Circuit Court of Arlington County that bonds it planned to issue would be valid. The Loudon County Board of Supervisors as well as Delegate Bob Marshall filed to oppose the certification, but the Circuit Court ruled last summer in favor of the Authority. Marshall appealed on the basis that NVTA is a political subdivision whose members are not directly elected, and thus the General Assembly unconstitutionally delegated its power to raise taxes. NVTA’s lawyers argued that the General Assembly retained the power to set the rates and could amend them at any time.

“We consistently have held that when the primary purpose of an enactment is to raise revenue, the enactment will be considered a tax,” wrote Justice S. Bernard Goodwyn in the ruling. Goodwyn concluded that because NVTA had the final decision on whether or not to impose the taxes and fees, the General Assembly had in fact delegated its power to tax. The ruling then points to several reasons how the power to tax is specifically reserved to the General Assembly, including Article I, Section 6 of the Virginia Constitution which reads in part:

“that all men . . . cannot be taxed . . . without their own consent, or that of their representatives duly elected . . . “

The ruling also cites Article VII, Section 7, which reads in part:

“No ordinance . . . imposing taxes . . . shall be passed except by a recorded affirmative vote of a majority of all members elected to the governing body.”

The General Assembly can grant cities and counties the power to levy taxes, but the ruling states NVTA is not itself a political jurisdiction. “NVTA is a political subdivision narrowly charged by the General Assembly with the responsibility of addressing certain regional transportation issues in the Northern Virginia localities it encompasses,” wrote Justice Goodwyn.

Any taxes already raised by NVTA are null and void.

In February, the Charlottesville City Council and the Albemarle County Board of Supervisors directed the
Thomas Jefferson Planning District Council to continue with efforts to seek enabling authority from the General Assembly to create a similar transportation funding mechanism for both localities.

Supervisor Dennis Rooker (Jack Jouett) said he would be watching to see how the General Assembly fixes the legislation.  “It’s a decision more of form than substance,” he said in a phone interview with Charlottesville Tomorrow. He said the proposed regional transportation plan for this area might include language that assigns the power to raise additional taxes to the City Council and County Supervisors, rather than to the proposed transit or transportation authority.

“I’ve read the opinion a couple of times, and I don’t think this prevents a regional transportation authority, “ Rooker said. “We’ll just have to do it in a way that complies with the ruling.”

Senator Creigh Deeds (D-25) issued a statement about the ruling that indicated he may seek an increase in the gas tax.

"The decision handed down by the Supreme Court of Virginia today invalidating the Northern Virginia Transportation Authority's taxing ability granted by the General Assembly sends a clear and unmistakable message to legislators in Richmond. We will not solve the transportation challenges facing us if we continue to pass the buck and shirk our responsibilities to lead.”

Sean Tubbs

Biscuit Run returns to the Planning Commission

On Wednesday, April 4, 2007, the Albemarle County Board of Supervisors unanimously referred the Biscuit Run project back to the Planning Commission, the body which had unanimously rejected it the week before.  They did so at the request of the developer who had expressed a  preference for responding to the outstanding questions identified by staff and the Planning Commission before the project is considered by the Board.  The Daily Progress reported on the situation last week and noted, "Board Chairman Kenneth C. Boyd said the property’s developers had told supervisors they made a mistake by not asking for more time to work with the commission."

Before the Planning Commission, attorney Steve Blaine had said his client could only spare a couple of weeks if the decision was deferred.  While the exact schedule the project will take in its further review by the Commission remains to be determined, the major issues to be resolved include proffers, transportation infrastructure, and sewer capacity.  The Planning Commission is expecting a complete revised application and a tentative work session date has been set for May 22nd.

Charlottesville Tomorrow has produced a 25 minute recording of the Board's limited discussion of the Biscuit Run rezoning. The highlights include:

• Discussion of new legislation (HB3202) approved by the General Assembly related to impact fees
  [See analysis on Bacon's Rebellion]
• Discussion of cash proffer recommendations coming soon from the County's Fiscal Impact Advisory Committee
• Discussion of the Transportation Funding Options Report received by the MPO in January 2006
• Discussion of seeking a Biscuit Run development designed to make early use of public transportation and different approaches for encouraging

Podcast produced by Charlottesville Tomorrow * Player by Odeo

Listen using player above or download the podcast:  Download 20070404-BOS-BiscuitRun.mp3

Brian Wheeler

Jim Bacon addresses Free Enterprise Forum luncheon

Jim Bacon & Neil Williamson

On March 6, 2007, the Free Enterprise Forum hosted a luncheon at the Omni Hotel in Charlottesville, Virginia.  Jim Bacon was invited to discuss the political realities of transportation policy as well as the links between economic opportunity and mobility in Virginia.  Mr. Bacon is the publisher of the online newsletter Bacon's Rebellion which he launched in 2002.  Prior to that he was Publisher and Editor in Chief of Virginia Business magazine. Mr. Bacon, who lives in Richmond, is among the most prominent and well respected of the new media writers providing insights on Virginia public policy issues and the Virginia General Assembly.

Podcast produced by Charlottesville Tomorrow * Player by Odeo

Listen using player above or download the podcast: Download 20070306-Bacon.mp3

Watch the program on Google Video:

Brian Wheeler

Toscano submits bill to aid Albemarle's TDR initiative

On the first day of the 2007 General Assembly, Delegate David Toscano (D-57th) filed a bill (HB2503) that would aid in Albemarle County's effort to implement a Transfer of Development Rights (TDR) program. TDR legislation was passed by the General Assembly in the 2006 session giving local government the ability to launch TDR programs.  However, the TDR initiative advanced by Supervisor David Slutzky (Rio District) would require adjustments in the state law.

According to Lee Catlin, Albemarle's Community Relations Manager, at the end of their meeting Wednesday evening, the Albemarle County Board of Supervisors voted 6-0 passing a resolution of support for the legislation, thus lending their support to the bill that had been submitted earlier in the day by Delegate Toscano.

Download Supervisors' resolution

Catlin said that the resolution "supported a change [in state law] that would improve the definition of development rights and receiving areas that would make it easier if the County, were it to go in the direction of implementing a TDR program."

Brian Wheeler

The transportation debate in Richmond

As we head into the next session of the Virginia General Assembly, I urge readers of this blog to keep a close eye on the analysis from Jim Bacon at Bacon's Rebellion.  He has had several good posts this week (At Last, a Real Land Use Debate) about the transportation proposals coming from the House Republican leadership. 

Jim Bacon summarizes the three main components of the Republican proposals:

• Require counties to create urban development areas large enough to accommodate 20 years of population growth. These areas would incorporate principles of New Urbanism design to include "open space, mass transit, walking trails, denser development and a commercially zoned component – reducing the need to use the transportation system."
• Invite counties to participate in pilot projects to take over responsibility for secondary roads within urban transportation service districts. As financial inducement, the state would give counties a share of state revenue and allow them to impose impact fees on development.
• Require the Virginia Department of Transportation to define "neighborhood" roads and then prohibit the state from accepting any more such roads into the state system for maintenance purposes. Either counties or homeowners associations would have to take over responsibility for maintaining the roads.
• [Note: Here is the House white paper summarizing the legislation]

This past June, I was shocked to hear the Secretary of Transportation on WINA telling our community that it would be helpful for us to have a list of priority projects which could receive the limited transportation dollars available.  I wrote him an open letter with a link to our existing priority lists.  The City of Charlottesville and Albemarle have jointly identified over $100 million in transportation priorities and they are working towards the creation of a regional transit authority.  With respect to the House proposals, Albemarle County has long had designated growth areas and long asked for the ability to levy impact fees. I assume these legislators would give our region high marks for our planning and cooperation efforts. 

We have also identified funding options to pursue in the event new funds don't come from Richmond.  Mr. Bacon has astutely pointed out over the past year that the answer to Virginia's transportation crisis is not just more money, it will also require changes to how we conduct the business of transportation and land use planning in Virginia.  Newcomers in Virginia often ask why we do things the way we do.  Why don't we have impact fees?  Why can't local government withhold approval for new developments until there is adequate infrastructure?  Why can't roads be built in advance to prepare for new development? 

These House Republican proposals seek to change the way we do business, but it is quite reasonable for our community, one that has invested so much in smart growth approaches, to also ask for the resources to ensure the success of our long range plans.  We should be asking our legislators how we will fund our existing priorities.  We should ask how these proposals will help with the almost 18,000 housing units already in our development pipeline. We should ask whether the problem will just be shifted to local government and local property taxes.

Locally, NBC29 has gotten initial reactions from Supervisor Dennis Rooker [view interview] who shares his concerns that our transportation priorities will require "millions of dollars a year of additional revenue... that would have to come from somewhere."

This is going to be quite interesting.

Brian Wheeler