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Virginia eyes killing gas tax, raising sales tax to pay for roads

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Local,Virginia,Transportation,Steve Contorno,Taxes

RICHMOND, Va. -- Virginia Gov. Bob McDonnell on Tuesday proposed eliminating the state gas tax drivers pay at the pump and raising the state sales tax to help raise $3.1 billion for desperately needed road work by 2018.

McDonnell's proposal would axe the 17.5 cent-per-gallon tax on gasoline, making Virginia the first state to do so. He proposed raising the statewide sales tax from 5 percent to 5.8 percent and to use the additional revenue for road maintenance and to pump up the transportation trust fund.

"If this was easy it would have been done 26 years ago," McDonnell said. "The time for action is now."

McDonnell's transportation plan would also gradually shift 0.25 percent of existing sales tax revenues to pay for road maintenance, with the first $300 million earmarked for Northern Virginia to help pay for Metro's Silver Line to Washington Dulles International Airport.

The additional funding for the Dulles rail project is intended to entice Senate Democrats to support the package. Lawmakers sought as much as $300 million for Dulles rail last year, only to be rebuffed by McDonnell and Republicans.

Even with the extra funding, Senate Minority Leader Dick Saslaw, D-Fairfax, opposes using the sales tax revenue for roads, saying it would divert that money away from schools, cops and social programs.

"I don't think it's going to fly," Saslaw told The Washington Examiner. "I happen to like public schools. Nor am I remotely interested in repealing the gas tax. There's a reason that all 50 states have it."

Other Democrats, however, said they're willing to at least consider the plan.

"It's something on the table," said Sen. Dave Marsden, D-Burke. "It's a serious pot of money."

McDonnell's transportation plan also calls for Virginia to impose its sales tax on online purchases, which would generate $240 million more a year for roads by 2018. But the state must wait for Congress' approval to do so. Congressional leaders assured McDonnell there is agreement to get that done.

The plan also imposes a $100 fee on alternative fuel vehicles to fund mass transit and would increase the vehicle registration fee by $15. Diesel fuel would continue to be taxed at the pump.

The state is expected to run out of money to fund even some basic road maintenance, like filling potholes, by 2017. McDonnell's proposal eliminates that problem and injects $1.8 billion by 2018 for new construction. However, local governments would not have money to fund their top transportation priorities.

scontorno@washingtonexaminer.com

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