Could Virginia governor's transportation plan open a Pandora's box?

By Keith Goble, Land Line state legislative editor | Wednesday, January 09, 2013

A first-of-its-kind approach is being touted in Virginia to help the state get road and bridge work done. At the same time, truckers were singled out for the damage that they do to the state’s roads.

Gov. Bob McDonnell unveiled a five-year, $3.1 billion transportation funding plan Tuesday, Jan. 8, that would include an unlikely source of revenue. Specifically, he wants to increase the state’s general sales tax to help raise more than $600 million over five years.

The state’s sales tax is used to fund a variety of budgets, including education and law enforcement.

To help consumers absorb the tax hike, the governor wants to stop collecting the state’s portion of the gas tax. The 17.5-cent-per-gallon tax on diesel purchases would continue. Also included in the plan is a vehicle registration fee hike and imposing a fee on alternative fuel vehicles.

The term-limited Republican revealed his plans on the eve of the start of the state’s regular session. It’s up to state lawmakers to see how much, if any, of his plan becomes law.

The main part of the funding package would eliminate the state’s 17.5-cent-per-gallon gas tax in exchange for increasing the sales tax by 0.8 percent. Also included is a proposal to raise the current 0.5 percent of the sales tax routed to transportation to 0.75 percent over five years.

McDonnell referred to the gas tax as a “stagnant revenue source” that no longer provides reliable funding for transportation.

“This is a math problem. The current revenue numbers do not add up to a safe, efficient and sustainable transportation network,” McDonnell said in a press release.

In its place, McDonnell said that sales tax revenues would replace the “archaic transportation resources” and create an “innovative and sustainable” transportation growth plan.

The governor said there are no plans to change how the state collects tax on diesel purchases. He noted that more than two-thirds of the state’s diesel fuel is sold to out-of-state truckers.

McDonnell also made a point to say the collection method is necessary to help compensate for the damage that trucks do to roads.

“Retaining the diesel fuel tax will ensure that the trucking community contributes financially to address the impact they have on Virginia’s highway networks,” he stated.

Ryan Bowley, OOIDA’s director of legislative affairs, said it’s concerning to see truckers singled out by the governor.

“The governor likes to talk about how important the transportation funding network is for the state’s economy, yet he describes the trucking industry as a nuisance,” Bowley said. “Certainly, that’s a bit concerning.”

Bowley did commend the governor for addressing the challenges facing transportation funding and the structural challenges of heavy reliance on the state’s fuel tax. However, he is alarmed to see a plan that shakes up the user-pays approach for motorists.

“Moving it so far away from a user-pays structure totally opens the door for money to be pulled away for other uses. They could be opening up a Pandora’s box where dollars get diverted away from the highway program.”

To guard against such diversions, the governor advocates that a change be made to the Virginia Constitution that would prevent transportation dollars from being spent elsewhere.

OOIDA encourages Virginia truckers to contact their state lawmakers about the governor’s plan.

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

Editor’s Note: You are welcome to share your thoughts with us about this story. Comments may be sent to state_legislative_editor@ooida.com.

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