Trying to address Virginia’s seemingly intractable road funding needs, Gov. Robert F. McDonnell has come up with novel scheme that would make Virginia the country’s first state to eliminate its gasoline tax and make up for it in part by hiking state sales taxes.
What is startling about the ploy is that goes against what has been the long accepted practice of asking motorists to help pay for the roads they use. McDonnell, somewhat disingenuously, says that today’s higher gasoline mileage cars are chipping in less than their fair share anyway.
McDonnell’s plan is a bit more complicated, and I’ll get into details in a second. It’s great the governor is trying to do something in a state government that is positively dinosaur-like in its attitudes toward taxes and the modern world. Virginia hasn’t raised its gas tax of $17.5 cents per gallon since 1986. Nor has it adjusted the tax to keep up with inflation, which is more than a little nutty, although that’s the fault of legislators, not the governor.
With the new plan, Virginians would not have to pay the state directly for how much they use state highways, aside from tolls. They’d pay instead every time they bought a new shirt or pair of shoes or a DVD. Out-of-state motorists driving from New York to Disneyworld won’t have to contribute anything at all for the use of Virginia’s roads unless they stop at a convenience store and buy a cup of coffee. Seems unfair.
Truckers, whose vehicles cause the most road damage, still would pay the same diesel tax.
In another weird twist, the tax plan would slap an extra $100 fee on alternative-fuel vehicles and use it for transportation. So, if you are going green with an electric car, you get a penalty, but if you keep that aging Humvee with its 14 miles per gallon habit, it’s perfectly OK.
As my fellow blogger James A. Bacon Jr. points out, the McDonnell plan goes against just about every modern theory of transportation taxation. It severs the tie between use and fees. It penalizes innovative, less polluting new types of cars. The trend for years had been to force Detroit and others to make better mileage cars by making it more expensive for drivers who insist on old, gas-hog clunkers.
To be sure, the McDonnell plan would boost public transit, such as Metro to Dulles, by adding a $15 fee to registering a car. All in all, the plan would raise about $310 million for transportation by 2018 – far short of what’s needed.
To get the rest, maybe up to $1 billion, McDonnell would divert general fund money from other areas such as education, which is plain wrong. There’s also some dreamy idea about getting money from sales through the Internet, but that’s the province of our hapless Congress.
McDonnell may be trying to think out of the box, but it’s really just a shell game within a shell game. He’s trying to shift, rename or hide a tax increase, just to get around the Neanderthal dogma of many Virginia legislators. Until voters figure this out and do something at the polls, they will continue to get the political system they deserve.