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Petersen: Eliminating Gas Tax, Funding Transportation Through Sales Tax Makes No Sense

Chap Petersen sounds off on McDonnell's new proposal to fund transportation projects.

Sen. Chap Petersen (D-34) called Gov. Bob McDonnell's proposal to eliminate the gas tax and fund state transportation projects by increasing the sales tax nonsensical in a blog post Wednesday.

McDonnell's plan calls for the elimination of the 17.5 cents per gallon gas tax and an increase of the sales tax from 5 percent to 5.8 for more than $600 million in more transportation funds. Read more about the proposal here.

If it passes, Virginia would be the first state to fund transportation projects this way.

Petersen said:

"The [Governor's] justification is that the gas tax at a fixed rate brings in less money in our hybrid age.  But that hardly seems like a reason to jettison it.  (And no other state has). 

Indeed, eliminating our traditional road funding because cars are more efficient makes about as much sense as canceling your child’s college fund because tuition keeps rising."

Read his blog post in its entirety on OxRoadSouth.

FairfaxMango January 10, 2013 at 01:33 PM
Eliminating the gas tax simply shifts the entire cost of road maintenance to Virgininians, instead of sharing it with Interstate-95 commuters heading to the beaches and truckers moving their wares. User taxes are the best way to fund transportation costs. Fight the fight, Chap!
Pete Kirby January 10, 2013 at 02:13 PM
I disagree. Having read this article, and the blog, I think Petersen draws some sketchy conclusions. He praises the gas tax as the way to fund our transportation needs (and presumably, since he is a State Senator representing Northern Virginia, he refers to OUR needs in that belief) and thinks that elimination hurts that effort. But to be more blunt, I have to say that if he is right about this idea, then Chap Petersen, like any of our other Northern Virginia representatives in the Virginia General Assembly, has failed us by not getting more of our taxes back for transportation needs. Our region needs billions of dollars for transportation. We have the most heavily used road, bus, and rail systems in Virginia, but the existing funding mechanisms are NOT working. It's not enough money for maintenance, improvements, or new projects. Mr. Petersen points out that the gas tax was enacted decades ago to earmark transportation funding, but in that era, the average MPG for a US auto was, what - 12-18 or 20 MPG? In 2004, the average MPG for US automakers was raised to 24 MPH, and in 2016 it will rise again, to 35 MPG. Simple math tells you that gas tax funds will continue to drop, even if electric car purchases does not reach his desired threshhold of 2% of US auto sales. This plan will yield more funds on sales volume alone. If he didn't devise a better plan in his 10 years in Richmond, then how can Chap Petersen, or anyone else in Richmond, criticize this plan now?
Sandra January 10, 2013 at 07:48 PM
It's not Petersen's fault. It's been known for years that Southern Virginia legislators have all of the power in funneling where our tax dollars go. They take from the Northern VA area and redistribute it to their areas via the good ol' boy network. Look at the stupid highway to nowhere that our esteemed (not!) governor is pushing and you'll see where our tax dollars end up.
Walt Culver January 10, 2013 at 10:36 PM
Decreasing gasoline-tax revenue is an endemic problem among the states. States such as Washington and Oregon, for example, are considering the worst of all solutions with intru-sive systems that are some combination of gasoline taxes, miles driven in the state, and tax PENALTIES for driving a more gas-efficient auto. (I thought we wanted fuel conservation to free ourselves of foreign oil?) More intelligent is Virginia's Republican governor's approach. Even with his facing the downstate GOP dinosaurs who dominate the state legislature, I see his proposed doing away with the state gas tax entirely, while increasing the state sales tax, as a brilliant move. It's a broader tax base for sure, it will tax less in bad economies and more in good econo-mies (following Keynes’s economic theories), and brings in revenues proportional to those who spend more vs. those who simply have to drive longer distances, perhpas with less effi-cient autos they may not be able to afford to replace. By the way, I did vote for McDonnell, even though I am a centrist and he had a decidedly very Right-leaning history, because he came across as being very bright. (Compare with Perry of TX, Scott of FL, and Walker of WI -- all of whom seem hapless ideologues.)
Pete Kirby January 11, 2013 at 03:08 PM
So the power of Virginia's legislators in southern parts of the state prevented anyone from Northern Virginia from devising an idea of any sort to address our woefully undersupported transportation needs? I do understand that Northern Virginia representatives have limited numbers to push a change, but when was the last time they tried? When we send our representatives to Richmond, should we have an expectation that they will do nothing to help improve our situation? If that is the case, then they are doing an outstanding job of doing nothing! No, wait, Chap Petersen has criticized the only idea that has been brought up to remedy this situation without ioffering any independent idea of his own. He has then exceeded expectations by doing something! I'm sorry, I don't buy that "it's not Petersen's fault."

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