State Democrats Say Help for Roads Should Come from Higher Gas Tax

By Hannah Hess, Virginia Statehouse News Wednesday, January 18, 2012

RICHMOND - As Virginia lawmakers seek a long-term funding fix to the state's crumbling road system, former Secretary of Transportation and Public Safety Delegate Vivian Watts, D-Fairfax, on Tuesday tried to steer them toward an increase to the gas tax.

Watts has proposed raising the 17.5 percent gas tax by 5 percent to fund statewide maintenance needs, a move that would cost a Virginia family with two cars, on average, an estimated $200 annually, she said. The gas tax in Virginia, including local, state and federal levies, is 38.2 cents per gallon. The proposed increase would boost the tax to 40.11 cents per gallon over the course of four years, less than all Virginia's neighbors except for Tennessee, whose tax is 39.8 cents.

“Everybody throughout the commonwealth, whether it’s dodging potholes, or whether it’s shoulder-to-shoulder congestion, knows we have a problem,” Watts said. “It is affecting our economic health, as well as the driving public’s health.”

State gasoline taxes are earmarked, by law, for transportation needs such as local road maintenance. Watts proposes an additional .5 percent tax in Northern Virginia, where roads are most congested.

Democrats point to the fact that Virginia has one of the lowest gas taxes in the nation — 37th out of the 50 states, according to the American Petroleum Institute — and say the rate has been eroded by inflation since it was implemented in 1986.

But Republicans, who control Virginia government, are dead set against raising the tax.

The Virginia Conservative Caucus, a coalition of lawmakers from both chambers, on Tuesday placed a motor fuel tax rate increase on a short list of bills they say they will oppose during the 2012 session.

Conservative Caucus Co-Chair Delegate Ben Cline, R-Amherst, called transportation a “core function” of government, in the same vein as education and health care. But Cline said he preferred Republican Gov. Bob McDonnell’s approach “before resorting to increasing taxes.”

McDonnell promises $4 billion over the next three years — the biggest infusion of new funding for Virginia transportation in 25 years — without raising prices at the pump. Alleviating congestion ranks high on his agenda, and he linked the issue to job creation in his State of the Commonwealth address, saying, “Our economy cannot grow if people and products cannot move.”

McDonnell wants to increase transportation’s share of year-end revenue overages to 75 percent and send a .25 percent larger share of state sales tax revenues to transportation, over the course of eight years.

Democrats, who blocked similar proposals in the Senate, are worried the governor will divert money away from other areas of the state budget, such as education and public safety.

“Any time you take out of the general fund, only Virginia taxpayers are paying,” Watts said. “You’re not picking up the 20 percent of the road users that are going through the commonwealth.”

Taxpayers filling their tanks in neighboring states pay more in gas taxes. By comparison, North Carolina's rate is 57.6 cents per gallon; Maryland's is 41.4 cents; and West Virginia's is 51.8 cents.

Gas station owners on the state's borders benefit from Virginia's low gas tax.

Khalid Chaudhary, owner of Carter's Quick Shoppe II, an Exxon station on Main Street in Danville, estimated Tuesday that 50 percent of his business comes from North Carolina, about 12 miles south.

"No, that's not a good idea," he said of Watts' gas tax proposal.

McDonnell's solution encourages more public-private financing for road projects.

But, Watts said, the private sector already performs more than 80 percent of the state's highway construction and maintenance.

The Virginia Department of Transportation has 7,500 full-time staff, the lowest level since 1965.

Watts said she doubts the gas tax increase will pass the 2012 General Assembly, but she wants to the idea to gain traction as a viable alternative and long-term solution to funding problems.

“It would be extraordinarily unpopular with voters and motorists,” said Martha Meade, manager of public and government affairs for AAA Mid-Atlantic, a statehouse advocate for motorists' rights.

Meade said an increase in the gas tax is long overdue and would be easy to administer, but it would not solve the long-term road maintenance funding shortfall because cars continue to become more fuel-efficient.

Still, AAA Mid-Atlantic supports McDonnell's proposals and salutes the governor for "continuing to keep a very sharp focus on the need to address the transportation funding crisis," she said.

But a true solution for Virginia's roads would need to include more money from more sustainable sources, Meade said.

The $4.7 billion state-managed Highway Maintenance and Construction Fund supports the nation's third-largest highway network, behind North Carolina and Texas.