Court: N. Va. Taxing Authority Unconstitutional

The state's highest court ruled that the regional authority created by the General Assembly to levy taxes for Northern Virginia transportation projects is unconstitutional.

In a unanimous opinion, the court said legislators improperly delegated taxing powers to the unelected members of the Northern Virginia Transportation Authority.

The decision affects seven regional taxes and fees that residents started paying Jan. 1. Those taxes and fees include new taxes on home sales, car rentals and repairs and hotel-room stays, as well as $10 safety-inspection fee and a $10 regional vehicle-registration fee.

Additionally, each locality represented also could choose to raise additional revenues by assessing impact fees on new development, imposing additional commercial real-estate taxes or adopting local vehicle-registration fees.

The ruling invalidates about $300 million in bonds financed by the taxes.

Northern Virginia jurisdictions were counting on the taxes and fees to pay for much needed transportation projects, including a new Fairfax County Parkway interchange, the widening of the Prince William Parkway and a rapid bus line through Arlington County and Alexandria.

"It's very, very bad news," says Rep. Jim Moran, D-Va., who was on The Politics Program on WTOP when the decision came down.

"The problem now is that we're not going to be able to get money for public transit, for bus systems, for rail to Dulles," Moran said. "We got some bridges that on a scale of 1 to 100 rank two in terms of their structural efficiency. Those things we are not going to be able to fix. This is really bad news."

In the state Supreme Court decision, Justice Bernard S. Goodwyn wrote that "the General Assembly has failed to adhere to the mandates of accountability and transparency that the Constitution requires when the General Assembly exercises the legislative taxing authority permitted by the Constitution."

Moran calls the decision "inexcusable" on the part of the court.

"Under the separation of powers, the legislative branch makes the law, and the judiciary decides whether the executive branch is acting consistent with that law. The judiciary doesn't make its own law. Once the legislature acts -- that is the law -- and there was no question when they acted if this was truly constitutional. The Attorney General had reviewed it and recognized it as consistent with the constitution."

The transportation plan was challenged by Del. Robert G. Marshall, R-Prince William.

"Good intentions alone don't make good government," Marshall said in an interview. "No taxation without direct representation. That's Government 101."

House Speaker William J. Howell, R-Stafford, said he was disappointed by the ruling. "But we'll work through it," Howell said. He did not elaborate.

Transportation authority officials planned to respond to the ruling later Friday.

The court agreed with Marshall's contention that the Virginia Constitution allows only officials directly elected by the people to levy taxes.

The decision reversed an Arlington County judge's ruling that the Constitution gives the General Assembly broad powers, including the power to create a "special purpose political subdivision" and grant it powers.

Marshall said the authority should have held off on collecting the taxes until the Supreme Court ruled.

"It was close to thievery what they were doing," he said.

The authority has 14 voting members, including officials from nine northern Virginia jurisdictions, along with two members appointed by the House of Delegates, one member appointed by the Senate, and two appointed by the governor. There are two nonvoting members.

(Copyright 2008 by WTOP and The Associated Press. All Rights Reserved.)