A couple of new ideas have been floated to address the state’s road money woes. One recycles an old idea — a regional referendum — that went down in flames a decade ago. Another, which would scrap the gas tax entirely and replace it with an increased sales tax, would bring an end to the old idea that the gas tax is really a user’s fee.
The latter idea comes from Del. Tim Hugo (R-Fairfax). According to the Richmond Times-Dispatch, it would seek to:
…eliminat[e] the state gas tax of 17.5 cents per gallon and replac[e] it by increasing the state and local sales tax from 5 percent to 5.9 percent.
... Hugo says his proposal would make Virginia the first state to scrap its gas tax. His bill also would allocate an additional 0.5 percent of the undesignated state retail sales tax revenue to the Commonwealth Transportation Fund.
Hugo outlined this idea to me earlier in the month and I’ve seen a draft working paper on this as recently as two weeks ago. The goal is one of those legislative holy grails — revenue neutrality. Maybe it is, maybe it’s not. The one thing it absolutely does is end the idea of fuel taxes as user fees and make the state’s sales tax even more regressive. Regardless, this approach will face tough opposition … and might possibly open a Pandora’s box if it survives.
The regional referendum proposal is a retread:
[Continue reading Norman Leahy’s post at Bearing Drift.]
Norman Leahy blogs at Bearing Drift. The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.