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I have a mixed reaction to Gov. Bob McDonnell’s tax proposal to fund highway and infrastructure improvements in Virginia.
We all know road conditions are deteriorating and there isn’t enough dough in the state’s coffers to fix it all. A recent trip on Interstate 95 from Alexandria to Fredericksburg during the evening rush hour (“rush” hour being a bit of a misnomer up there) reinforced that impression. The fact that the replacement of the crumbling Lewistown Road overpass in Hanover County keeps getting pushed off into the murky future is another sign.
Many of us have been contemplating a quite logical increase in the gasoline tax to meet future VDOT needs and fighting the threat of toll booths on I-95.
So I was as surprised as anyone by McDonnell’s proposal to eliminate Virginia’s 17.5 cent-a-gallon gas tax completely and replace it with an increase in the state’s sales tax from 5 percent to 5.8 percent. Other components of the plan are to increase vehicle registration fees.
The governor says this plan will raise an additional $3.1 billion to fix our congested and deteriorating roads.
While I’ve got to give the governor credit for thinking outside the box – way outside, in fact – I’m not sure I’m entirely on board, although I’m sure the petroleum industry and gas station lobbies are jumping with glee. Imagine – we are going to encourage people to buy and consume more gasoline in Virginia.
To heck with our nation’s dependency on foreign oil!
In your face, treehuggers!
The plan also removes the user fee rationale for the gas tax by doing away with the tax entirely, thus shifting the burden of fixing the roads on all Virginians, including the ones who don’t own cars or who own them but rarely drive them. More importantly, it lets folks from other states who travel through Virginia entirely off the hook (unless that I-95 toll booth resurfaces in all of this).
Interestingly enough, the tax on diesel fuel is unaffected by all of this, so truckers do not share in the bounty. Also left out of the equation are people who own clean diesel automobiles.
Another facet of the plan is that owners of alternative fuel vehicles will pay a $100 annual registration fee, thus penalizing them for lowering our national addiction to oil and being environmentally friendly citizens. Interestingly enough, many of them received federal tax credits to buy these politically correct vehicles in the first place. What the feds give, Virginia takes back, I suppose.
With all of these built-in philosophical contradictions, I expect McDonnell’s tax plan to raise a lot of questions in the state legislature.
Do politicians who run for office on an anti-tax platform curry favor with their constituents by eliminating one tax only to jack up another and take even more money out of taxpayers’ pockets? You wouldn’t think so, would you?
From a purely selfish standpoint, I am not enamored with the notion of doubling the registration fee on automobiles. I own an aging RV, an SUV and four interesting but not especially valuable collector cars. I’ll take a hit on this.
But if gas prices fall as a result of eliminating the state tax, it should lessen the blow. Of course we are not assured that the fuel retailers will hand us the entire 17.5 cents-per-gallon difference, are we?
Raising the state sales tax will probably place a greater burden on some segments of society and lighter burden on others. As a retiree, I don’t plan on spending a lot on clothing and a number of other taxable items. When I drive to New Hampshire each summer I’ll tank up in Virginia, take my shopping list with me to a state with no sales tax, and tell the retailers there, “Gov. McDonnell sent me.”
I’m sure others will find some interesting nuances in the governor’s proposal that I haven’t hit on. We ought to at least get a dialogue going.
Politics being politics, I also expect the General Assembly, if it buys into this scheme at all, will find a way to surgically remove the parts I find attractive and pass the objectionable aspects.
- Greg Glassner, Editor Emeritas