Virginia Senate OKs fuel tax increase

| 2/22/2008

With officials in Virginia searching for ways to generate transportation revenue, a bill that would increase the state’s fuel tax by 30 percent is halfway through the statehouse.

The state’s Senate voted 25-15 to approve a bill that would increase the per-gallon tax on diesel and gas by 5 cents during the next five years. It’s has moved to the House Finance Committee for further consideration.

Sponsored by Senate Majority Leader Richard Saslaw, D-Fairfax, the measure – SB713 – would increase the state’s 17.5 cent-per-gallon tax on motor fuels by a penny each year until 2014. The bill’s fiscal impact statement shows the increase would generate $47.2 million the first year, with that number rising to $281.6 million by 2014.

Saslaw said the tax increase is needed to help fill a $290 million shortfall in the budget used for road maintenance. To make matters worse, legislators are preparing to repeal the controversial “abusive driver” fees approved in 2007 that were intended to help fund transportation.

The likelihood for getting Saslaw’s bill through the statehouse appears to be a long shot. Democratic Gov. Tim Kaine and the Republican-controlled House have been resistant to efforts to raise taxes this year. In fact, one House panel already rejected a separate measure to increase the fuel tax by 5 cents per gallon.

Instead, some GOP lawmakers say they would prefer to use existing revenue – such as a portion of the existing sales tax – to fill any maintenance gaps.

To view other legislative activities of interest for Virginia in 2008, click here.

– By Keith Goble, state legislative editor