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Virginia Politics
Posted at 06:18 PM ET, 11/19/2012

McDonnell weighs tying gas tax to price of fuel

Anyone trying to read the tea leaves on transportation funding in Virginia might want to take note: Within the space of 60 seconds Monday, Gov. Robert F. McDonnell (R) mentioned not once, but twice, that the gas tax is the only major state levy that does not rise with prices.


(Tracy A. Woodward - The Washington Post)
McDonnell made that point after a reporter asked if he would consider making the gas tax a percentage of fuel prices. Right now, it is a flat 17 1/2 cents on each gallon of gas. So when the price of gas goes up, the state revenues do not.

“I’m looking at a range of things,” said McDonnell, responding to questions in Richmond after an unrelated meeting with legislative and business leaders. “I can tell you that every other major tax in Virginia — the sales tax, the corporate income tax, and the [personal] income tax — all fluctuate with economic activity because they’re a percentage. ... We’re looking at whether or not ... it should fluctuate with economic activity, like every other tax in Virginia.”

McDonnell also noted, however, that he doesn’t support “broad-based tax increases in a down economy.”

Regardless of whether McDonnell ultimately supports such a change, he sounded determined to address transportation in the coming General Assembly session.

“The bottom line is, we have a math problem,” he said. “We’ve got dramatically less gas tax revenue coming in than we did five, 10 or 15 years ago. And the cost of asphalt is up 300 percent. And the demands of our citizens have gone up as well. ... I’m going to be fairly adamant with the General Assembly this year, that we’ve got to stop kicking the can down the road. ... We have to have a transportation funding plan ... or we’re going to look back in five or six years and have virtually no money left for construction.”

By  |  06:18 PM ET, 11/19/2012

 
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