New Virginia I-81 bill calls for fuel tax increase, more trucking-related fees

By Tyson Fisher, Land Line staff writer | 4/5/2019

Legislation to fund Interstate 81 improvements in Virginia has gone through another major change. The latest version accepted by the General Assembly on Wednesday, April 3 takes tolls off the table by using a fuel tax increase instead.

Both the Virginia House and Senate accepted Gov. Ralph Northam’s recommended amendments to the I-81 Corridor Improvement Program and Fund bill. Unlike previous versions, Northam’s amendments offers more immediate funding without tolls.

In the previous version, the bill called for a report on how to fund the I-81 project to be submitted by the end of the year, effectively allowing the state another year to mull over funding mechanisms. That report is still included in the latest version. However, additions include funding in the meantime.

To start, the bill calls for a fuel increase. Both gasoline and diesel will increase by 2.1%, or 7.6 cents and 7.7 cents per gallon, respectively. The increase applies to the Interstate 81 region.

At eight pages, the latest version adds five more pages to the previous bill. In addition to the regional fuel tax increase, heavy duty trucks will incur four more fee increases in various areas.

First, diesel will get another tax. In addition to the regional fuel tax increase, diesel will incur a statewide tax increase of 2.03% or 6.8 cents per gallon. If passed, that tax will go into effect on July 1, 2021.

The bill also increases the International Fuel Tax Agreement surcharge this July. The additional amount per gallon will be calculated by multiplying the average fuel economy by $0.01125. “Average fuel economy” is calculated by dividing the total taxable miles driven in the state by the total taxable gallons of fuel consumed, as reported in IFTA returns in the preceding taxable year. On July 1, 2020, that increase jumps to $0.0225.

In lieu of the IFTA increase, carriers registering trucks that are not registered under the International Registration Plan will pay a fee of $150 per year for each qualified highway vehicle. From July 1, 2019, through June 30, 2020, this fee will increase proportional to the IFTA tax increase. Every July 1 beginning 2020, this fee will be adjusted based on the percentage change in the IFTA tax.

The bill calls for an additional fee for the registration of all vehicles not used for the transportation of passengers. Those increases are:

  • Vehicles 10,001 through 15,000 pounds by $6 per 1,000 pounds.
  • Vehicles 15,001 through 25,000 pounds by $7 per 1,000 pounds.
  • Vehicles 25,001 through 29,000 pounds by $9 per 1,000 pounds.
  • Vehicles 29,001 through 40,000 pounds by $10 per 1,000 pounds.
  • Vehicles 40,001 through 45,000 pounds from $11.15 to $22.50 per 1,000 pounds.
  • Vehicles 45,001 through 50,000 pounds from $11.25 to $22.50 per 1,000 pounds.
  • Vehicles 50,001 through 55,000 pounds from $13.25 to $23.25 per 1,000 pounds.
  • Vehicles 55,001 through 76,000 pounds from $15.25 to $23.25 per 1,000 pounds.
  • Vehicles 76,001 through 80,000 pounds from $16.25 to $23.25 per 1,000 pounds.
  • All private and for-hire/for-rent vehicles would pay the same rate per 1,000 pounds.

The above additional fees do not apply to vehicles used exclusively for farming. Not to be left out, the bill establishes additional fees specifically for farm vehicles.

Reaction from OOIDA, others

“We understand that infrastructure improvements will need revenue from truckers, as uncomfortable as that is,” said OOIDA Manager of Government Affairs Mike Matousek. “We are pleased that tolls have been taken off the table. We wouldn’t consider the replacement funding mechanisms perfect, but the fact that they are earmarked for the intended purpose of improving I-81 and not at risk of diversion softens the blow.

“All that said, no issue ever truly goes away in politics. So we need to stay involved and highlight the negative impact tolling has on small-business truckers and fight against diversions of highway funding.”

The Alliance for Toll-Free Interstates welcomed the new version with open arms.

“ATFI applauds the General Assembly for accepting the governor’s new plan to fund improvements to Interstate 81 through funding mechanisms other than tolls,” ATFI Communications Director Stephanie Kane said in a statement. “We know Virginians want to improve I-81 and are willing to pay for it. But how they pay for it matters, and they let that opinion be known. We are glad the governor abandoned his push for tolls in favor of more common-sense transportation funding methods.”

The Virginia Trucking Association is also pleased with the latest version of the funding bill. VTA President Dale Bennett said the trucking industry is stepping up to the plate to pay a large share of the costs, rather than paying nearly all of the costs, while ensuring all revenue is directed to the roads truckers use.

“This package is certainly better than where we started,” Bennett told Land Line.

Indeed, the original bill called for truck-only tolls before taking an about-face to include passenger vehicles. Eventually, any toll language was excluded, leading to the present day bill. Although the bill does tack on more fees for truckers, Bennett said it is certainly better than the alternatives.

“The proposed plan significantly impacts the trucking industry and our customers, but it is more efficient and less harmful than tolling existing highways,” Bennett said.

For the regional fuel tax increase, 100% of funds will go to the I-81 corridor plan. Since all other taxes are statewide, approximately 41% of that revenue will go toward I-81, about 9% to northern Virginia roads and the remaining half of revenue will be used for other interstate improvements in the state.

The previous version was submitted by the Virginia House and Senate on Jan. 31. Originally, both bills included a provision that would toll primarily truckers to fund the project while not allowing any additional taxes at the same time. However, the substitute bills did not even mention the word “toll.” Rather, lawmakers decided to further explore funding possibilities through the end of the year. Nothing else was included to establish funding in the meantime.

The most recent bill keeps the prior version intact, leaving room for the possibility of a toll option in the final report due in December. All additions were immediate funding, as lawmakers decided it could not wait.



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