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McAuliffe Proposes Taxing NoVa Real Estate Sales To Support Metro

Maryland Gov. Larry Hogan, Virginia Gov. Terry McAuliffe and D.C. Mayor Muriel Bowser at an Aug. 28 regional meeting

Part of the solution to funding Metro permanently could come from an increased tax on Northern Virginia real estate sales. 

Gov. Terry McAuliffe plans to introduce a proposal calling for three new taxes in order to raise an additional $65M a year to put toward Metro, the Washington Post reports

The proposal would increase the real estate transfer levy from 15 cents to 25 cents per $100 of assessed value, creating an additional $33M of revenue. It would also increase the hotel levy, a tax on hotel stays, from 2% to 3% to raise $15M. The third tax increase would apply to wholesale gasoline, a move that would add 2 cents a gallon to the pump price and bring in $17M in revenue. 

The taxes would only apply to the NoVa jurisdictions of Alexandria, Arlington, Fairfax City, Fairfax County, Falls Church, Loudoun, Manassas, Manassas Park and Prince William, areas that benefit from Metro and also lean Democratic. The $65M raised would be combined with $85M that NoVa would earmark from existing transportation funds. That $150M would equal the share Virginia would need to pay annually as part of the $500M in dedicated funding Metro said it needs. 

The plan would be expected to continue under Governor-Elect Ralph Northam, McAuliffe's lieutenant governor. McAuliffe has previously said he would only provide dedicated funding if D.C. and Maryland committed to do the same, and if the 16-member Metro board were replaced with a five-member reform board. 

D.C. proposed a region-wide 1% sales tax to permanently fund Metro, but its neighboring states have not supported the idea. Maryland Gov. Larry Hogan has proposed a four-year, $2B plan, but has not committed to a longer-term solution.