By Mark Robinson
Capital News Service
RICHMOND – Area lawmakers expressed their optimism for a discussion on Gov. Bob McDonnell’s proposed transportation reforms that would include increasing the sales tax and abolishing the nearly 27-year-old gas tax, making Virginia the first state in the country to do so.
“It’s a positive thing that the governor is finally proposing sustainable legislation on this issue,” said Sen. Creigh Deeds, D-25. He added that he didn’t support the notion of completely shifting the burden to the sales tax.
Del. Ben Cline, R-24, pledged his support to the governor’s measure in a written statement, as long as excessive fees were not imposed on Virginian motorists and all changes to the tax code were neutral for in-state taxpayers.
“During this fragile economic recovery from the worst economic recession in years, it would be wrong to increase the tax burden on working families and small businesses struggling to make ends meet,” Cline said in the statement.
The measures are a part of the governor’s proposed $3.1 billion plan to fund improvements to Virginia’s transportation system over the next five years. The funds would supplement $14 billion of transportation projects already under way in the commonwealth, the most in Virginia’s history.
McDonnell painted the state’s gas tax as “outdated” because of increased inflation and better fuel economy since it was last changed in 1986. He said during his Tuesday afternoon press conference that providing further funding to transportation was the only way to ensure Virginia could continue its economic growth.
“Declining funds for infrastructure maintenance, stagnant motor fuels tax revenues, increased demand for transit and passenger rail and the growing cost of major infrastructure projects necessitate enhancing and restructuring the Commonwealth’s transportation program and the way it’s funded,” McDonnell said at the press conference
Among the proposed changes:
- The current 17.5 cents per gallon gas tax, which accounts for more than 30 percent of the state’s transportation revenues, would be eliminated in favor of a sales tax increase from 5 percent to 5.8 percent. McDonnell predicted this would generate more than $600 million in additional transportation funds. The 17.5 cent tax on diesel would remain intact.
- To supplement the increase in sales tax, a higher percent of the state’s sales tax would go directly to transportation funds – from .5 cents to .75 cents over the five years.
- The plan would impose an increase of $15 for each vehicle registration, resulting in an average vehicle registration cost of $56 per vehicle, McDonnell said.
- The state would impose an annual $100 alternative fuel vehicle. The governor dismissed the idea that the fee would deter people from buying alternative fuel vehicles. More than 91,000 are currently registered in Virginia.
McDonnell’s plan would use new revenues and more money from the general fund, an approach he said would appease lawmakers on both sides of the aisle. In the past, Republicans have supported using money from the general fund for roads as a core function of government. Democrats, on the other hand, have rejected previous attempts to use general fund dollars for transportation.
If passed, the measures would take effect July 1, 2013. The Republicans hold a majority in the House of Delegates and a tie-breaking vote in the Senate. Lt. Gov. Bill Bolling expressed his support of McDonnell’s plan.