By Whitney Spicer, Capital News Service

And Matthew A. Ward, Staff Writer

Virginia’s first major overhaul of transportation funding in 27 years cleared the House Friday by a two-thirds majority and was due for a Senate vote before that chamber adjourned for the evening.

The compromise bill, hammered out by a 10-member conference committee and delivered Wednesday, would potentially raise close to $900 million a year in transportation revenue, primarily by replacing the current 17.5-cents-per-gallon tax with a 3.5-percent wholesale gas tax and a 6-percent tax on diesel fuel.

McDonnell, though he had initially proposed eliminating the gas tax altogether, expressed satisfaction with the comprise.

“When we launched our effort to fix transportation, we called for decreasing Virginia’s reliance on the steadily decreasing transportation revenue source of the gas tax,” McDonnell said. “The plan … achieves that goal.”

McDonnell says the new plan would lower what Virginians pay at the pump by an estimated 6 cents per gallon, adding up to an annual saving for motorists of almost $272 million.

The plan compensates for the decrease in gas tax revenue by proposing to raise the state’s sales tax from the current 5 percent to 5.3 percent.

“Tying transportation funding to a tax that every Virginian pays is a common-sense move,” McDonnell said. “In addition, the sales tax is a less regressive tax than the gas tax.”

Many rank-and-file Republican lawmakers rebelled against the bill, viewing it as too much like new taxation. Anti-tax activist Grover Norquist branded it a “massive tax hike” and reportedly singled out for criticism Suffolk’s voice in the House, Chris Jones, the lead conferee on the committee.

In the end, 25 Democrats, or 78 percent of the House Democratic Caucus, supported the bill, according to a caucus news release.

Compromise negotiators also agreed to devote 0.675 percent of the state’s general-fund revenues to transportation — less than McDonnell and the House of Delegates proposed but more than the Senate had supported.

McDonnell maintained that transportation is vital to the prosperity of Virginia and deserves a high priority.

“Transportation must be treated like a core function of government, and it must share in our growth in general fund revenues to a greater extent than currently structured,” he said.

Though reports have suggested the compromise would restrict new tolls, specific language to that effect had not been announced.