Virginia looking to eliminate their gas tax?
posted at 7:21 pm on January 14, 2013 by Erika Johnsen
President Obama likes to include ‘infrastructure investment’ as part of the justification for his pushes for new spending, but he often conveniently forgets to mention how we’re supposed to pay for all that infrastructure development when we’re currently racking up trillion-dollar deficits every year — unless you count “asking the wealthy to pay a little more” as a viable solution for our spending problems, which I don’t.
Inflation, fuel efficiency, alternative vehicles, and other factors that mean that gas consumption no longer grows in tandem with road use mean that many states’ gasoline taxes are an outmoded method for collecting revenue for infrastructure and transportation projects, and in Virginia, Gov. Bob McDonnell is proposing what he says will be a more efficient way of financing and caretaking Virginia’s (amazingly congested, I might attest) highways and byways and funding transportation projects.
On the eve of the 2013 General Assembly session, Gov. Bob McDonnell proposed increasing the state’s sales tax and eliminating the gasoline tax in an overhaul of how the state funds transportation.
He wants to increase the state and local sales tax to 5.8 percent from 5 percent and permanently shift the revenue source for transportation to a tax with rising revenue, from one with diminishing buying power.
If lawmakers approve the plan, Virginia would be the first state in the country without a gas tax.
In the last full session of his term McDonnell is seeking a solution to the road-funding problem that has vexed Virginia lawmakers for decades. Overall, McDonnell says the plan would raise $3.2 billion in additional funding over the next five years, or through 2018.
Yet another reason why more federalism is usually an excellent idea: Competition between states can lead to innovations in tax codes, just like everything else. The proposal is getting a wide range of mixed reviews, but if nothing else, it’s a bold new plan for tackling the obviously glaring problem of transportation funding, and certain businesses at least seem to like the idea. Here he is on Cavuto on Monday afternoon defending his plan: