Editorial: Transportation plan is built on steadier revenue

Last month, the Herald-Progress questioned the legitimacy of Gov. Bob McDonnell’s then-pending plan for transportation funding. Last week, Virginia was introduced to the gubernatorial outline. We have to admit, we were impressed, though concerns remain.
McDonnell’s plan cuts Virginia’s 17.5-cent gasoline tax while keeping the tax on diesel fuel in place due to the “disproportionately large” impact heavy trucks have on state roads. The gas tax had not kept pace with inflation and wasn’t pulling its weight. It didn’t make sense to increase this levy – as some other legislators had proposed – when it had already shown itself to fall short over time due to increased vehicle fuel efficiency and other factors.
McDonnell’s plan also raises the state’s sales and use tax by .8 cents and increases its current allocation to transportation by .25 cents. The governor estimates the plan will produce an additional $1.8 billion for road construction over the next five years.
We didn’t predict McDonnell would raise taxes, noting that in the past, he had passed the tab to localities when it came to funding state responsibilities. We assumed he would rob Peter to pay Paul in this instance by moving money from other core areas to fund roads. However, targeting the sales tax ensures a certain degree of revenue stability and is a wise move.
Less wise is increasing annual vehicle registration fees to fund intercity passenger rail and transit. Don’t get us wrong; rail is great. Ashland’s built around it. It’s just strange to tax vehicle owners to pay for tracks that they don’t drive on.
Equally strange is another revenue generator championed by the governor. Even though McDonnell calls himself a supporter of “alternative fuel vehicles,” under his plan he will tax them $100 annually. If Virginia’s gas tax was still on the table, this might make some sense; these vehicles don’t rely on gasoline and therefore don’t pay state taxes. The governor justifies this part of his plan by pointing out that Virginia gets a lesser portion of federal gas tax loot because of these vehicles.
We don’t buy it. After all, the same car owners pay sales and income tax to the state. It’s not as though they’re getting a free ride (pun absolutely intended).
The state should be encouraging these types of vehicles, not taxing them.
Then again, maybe it just comes down to politics. Have you ever seen a GOP sticker on a Prius?

Posted on Thursday, January 17, 2013 at 10:44 am