Legislators brief business alliance on General Assembly

State Sen. John Watkins (R-10th District) and Delegate Lee Ware (R-65th District) last week briefed members of the Western Chesterfield Business Alliance on the current General Assembly session, with most of the discussion and questions relating to the federal heath care plan and transportation funding.

Both legislators expressed opposition to the recently passed federal health care law and support for additional monies for the Virginia Department of Transportation (VDOT).

Normally, Medicaid spending for the state increases by less than 2 percent per year, but the administration of Gov. Bob McDonnell is forecasting a 40 percent increase if mandatory health insurance becomes law, according to Ware. Virginia is one of many states contesting the legality of the new law in federal court.

“Do we really want another massive agency in place?” asked Watkins. “It’s going to be difficult.”

Even though preparations for a change in health care should be taking shape, if the state is to be ready for the new law, the governor’s office is not preparing for the possibility, in case that might be interpreted as an endorsement of the legislation, Watkins said.

Asked if the state anticipates that small businesses will drop their existing health insurance to join a government plan, Watkins shook his head, saying, “That’s a problem. This needs to be sorted out.”

On the transportation issue, Ware said Virginia “couldn’t borrow its way out of the [funding] problem.” He added, “We need an improved steam of revenue…or transportation will impact other core functions of government.”

Since 1986, Virginia has collected a gas tax of 17.5 cents per gallon. Watkins said because of increasing road costs, in four to five years Virginia won’t be able to secure federal road funding because the state won’t be able to afford matching the federal funds, a requirement for receiving them.

If Virginia had pegged its tax rate to the cost of gas, as other states have, it would have taken in $1.2 billion more, Watkins said. Each penny increase generates $50 million to $60 million in gas tax annually. To handle the squeeze, VDOT has trimmed its employees from 12,000 to 7,000, but much of the maintenance is outsourced to private companies.

“We probably need to increase the gas tax by 10 to 15 cents per gallon,” said Watkins. Many Republicans in the legislature have been reluctant to increase taxes.

Both legislators were pleased that Virginia secured commitments late last year for Amazon to build distribution facilities in Chesterfield and Dinwiddie; the Amazon center is expected to add an estimated 1,350 jobs to the regional economy. The Internet company has received $7 million in government grants.

However, Watkins and Ware believe Amazon should pay state sales tax. “It’s a matter of equity…to be on the same playing field,” explained Ware.