MCLEAN, Va. - A few weeks ago Virginia Gov. Bob McDonnell announced a plan to get rid of the state's 17.5-cents-a-gallon gas tax and replace it with a transportation-targeted increase in the state sales tax. The nationwide response has been as varied as it€™s "a novel approach" to "it€™s bad tax policy," writes USA Today.
So while all eyes are on Virginia, a debate is "breaking out" in state capitals from Vermont to Texas: "How do we maintain and expand our vital-but-aging networks of roads, bridges and urban transit systems?"
Jeff Caldwell, press secretary to Gov. McDonnell, told USA Today that the gas tax plan in Virginia reflects the notion that gas tax revenues in the state will continue to decline. The news source cites likely culprits to this idea: Since 2001, the number of miles driven per person has declined for every age group, and more commuters are using public transit, bicycling or walking.
"If you raise the gas tax, it will inherently drive up the price of gas without addressing long-term the issue of declining (gas tax) revenue," said Caldwell.
On Friday, members of the Virginia Petroleum, Convenience and Grocery Association met with state House Caucus Chairman Tim Hugo and Virginia Secretary Transportation Sean Connaughton to address concerns with the governor€™s proposal. "VPCGA has taken a very deliberative approach reviewing the governor€™s proposal because if successful its ramifications will be felt far beyond Virginia€™s borders. We appreciated today€™s meeting, which helped to narrow the list of issues of concern," Michael O€™Connor, VPCGA president, told NACS Daily.
McDonnell's proposal, however, has its detractors: "It's fundamentally bad tax policy," Carl Davis, senior analyst at the Taxation and Economic Policy, told the news source. "With the gas tax, if you drive more, you pay more in taxes. Or, if you drive a heavier vehicle that does more damage to the roads, you pay more. If you get rid of the gas tax entirely and rely on the sales tax, you are very literally giving drivers a free ride."
Davis recommends indexing state gas taxes to the rate of growth in the costs of concrete, steel and other infrastructure components. While no state currently does this, he told the news source, Florida's gas tax rate is linked to the inflation rate measured by the consumer price index, and 13 states link their gas tax rate to the price of gasoline.
Meanwhile, transportation funding is being considered in at least 13 states:
States like Pennsylvania, Massachusetts and Michigan are looking at new taxes on gasoline stations, higher motor vehicle registration fees and more tolls.
The Texas Legislature is considering a bill to rededicate all motor vehicle taxes for transportation, money that is currently allocated to education and other non-infrastructure expenditures, notes the news source. Texas hasn€™t raised its gas tax in 21 years.
Wyoming could be the state closest to raising its gas tax this year. A proposal is circulating to boost the gas tax from 14 cents a gallon to 24 cents a gallon. Massachusetts and Missouri are also considering a higher gas tax.
Oregon, Washington and Vermont are among states considering replacing or supplementing their gas tax with one that would tax vehicles by the miles traveled. At least 18 states have studied the idea, notes hew news source, although no state has moved much beyond the experimentation phase.
Last week the Washington, D.C.-based Tax Foundation released a new map of state gasoline taxes, minus the federal gas tax of 18.4 cents per gallon. New York has the highest state gas tax at 50.6 cents per gallon, while Alaska has the lowest gas tax at 8 cents a gallon.