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Va. Gov. Youngkin calls for gas tax holiday, fueling more discord in divided state legislature

Virginia Gov. Glenn Youngkin (R) pumps gas for customer Tammy Beard at a BP station in Henrico County on March 16. (Bob Brown/AP)

Virginia Gov. Glenn Youngkin (R) on Wednesday called on the General Assembly to approve a three-month “gas tax holiday” when it reconvenes for a special session to approve the state budget.

The governor announced his plans to propose legislation to suspend the state tax of 26.7 cents per gallon for gas and 27 cents per gallon for diesel fuel during a campaign-style event in Henrico County, where he pumped gas at a gas station while commiserating with customers over the sharp rise in prices at the pump that have come with inflation and Russia’s invasion of Ukraine.

“These rising gas prices are hurting Virginians, and we need to do something about it,” Youngkin said later in a statement that blamed the Biden administration for policies that have “constrained” the country’s domestic supply of oil.

The proposal, which would need to be approved by Virginia’s divided General Assembly, is in response to the sharp increases in gas prices since the United States and other countries stopped importing Russian oil, a move that drove up fuel prices globally.

Several states have been considering suspending or otherwise altering their gasoline taxes as a form of relief. Last week, Maryland Gov. Larry Hogan (R) and Democratic leaders announced that they plan to implement a month-long suspension of that state’s gasoline tax of 37 cents per gallon.

In Virginia, state lawmakers on both sides of the political aisle have also called for some relief. But they have disagreed on what form that help should take.

Rising gas prices pump up discord in Richmond as Democrats call on Youngkin to declare emergency

During the recent General Assembly session, Youngkin backed a bill to lower the state gasoline tax by 5 cents, where it was in July before it went up as part of a 2020 law that raised it in increments for two consecutive years and tied future increases to inflation.

The legislation sponsored by Del. Michael J. Webert (R-Fauquier), which would have delayed the planned increases by a year, passed the Republican-controlled House but died in the Senate, where Democrats hold a slim majority.

Democrats argued that consumers were unlikely to see much benefit from a small, temporary tax reduction, while funding for roads would suffer from lost revenue. The state tax is projected to generate about $1.2 billion for such transportation improvements during the current fiscal year.

Youngkin should instead declare a state of emergency over Russia’s invasion of Ukraine, which would activate a state law prohibiting price-gouging in times of disaster, Democrats said, citing examples where gas stations have jacked up their prices.

Youngkin and other Republicans rejected that idea, arguing that the problem was more about failed energy policies than price gouging.

On Wednesday, the disagreements continued.

Youngkin said higher-than-expected revenue in the state transportation fund would make it easier to suspend the gas tax from May through the end of July.

The governor’s proposal would also cap the annual adjustment to the gas tax at no more than 2 percent per year instead of linking it to inflation, his office said.

Those changes are possible because the state transportation fund has $671.4 million more than what was forecast for the current fiscal year and $457.6 million more than it expected will be needed for the next fiscal year, Youngkin’s office said.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) said doing away with a major source of funding for transportation improvements for even 90 days would be too costly in parts of the state that have crumbling roads and bridges.

A former gas station owner, Saslaw noted that prices for gasoline and other types of fuel have begun to drop, which would affect state revenue.

“In my district, the region can’t currently maintain our current infrastructure much less any new construction,” Saslaw said in a statement.

House Republicans called Youngkin’s proposal “a common-sense measure” that would utilize unexpected revenue during a crisis.

“With revenue this strong, there’s no reason not to provide as much relief to Virginia’s hard working families as soon as possible,” Del. Barry D. Knight (R-Virginia Beach), chair of the House Appropriations Committee, said in a joint statement with House Speaker Todd Gilbert (R-Shenandoah).

The issue is bound to add another layer to the bitter partisan feelings that have dominated the state legislature since Youngkin took office in January.

The governor has yet to call a special session to get a state budget passed after the General Assembly failed to reach an agreement during its regular session earlier this month.

In a prelude to how the special session might go, a Republican strategist who worked on Youngkin’s political campaign singled out one of the governor’s sharpest critics in a Twitter post about the gasoline tax proposal.

“Awfully quiet over in @SenLouiseLucas’s corner,” Matt Wolking, the strategist, tweeted about Sen. L. Louise Lucas (D-Portsmouth). “Don’t expect much cooperation from her though since this proposal is about helping Virginians, not begging for campaign cash or retweets.”

Lucas, the chamber’s president pro tempore, responded by predicting the governor’s proposal would be “wrecked” by Saslaw.

As someone who owned and operated a gas station for 30 years, Saslaw “understands how gas is actually priced for consumers,” Lucas wrote, suggesting that the governor include his proposal in the ongoing negotiations over the state budget.