Virginia Gov. Bob McDonnell (R) has a new transportation funding plan – and it’s interesting enough to warrant careful consideration. While imperfect, it’s ambitious and a good starting point for further debate.
McDonnell promised an overhaul of transportation funding during his 2009 campaign, and while different people may view the solution differently, no one is arguing that the current system doesn’t need an overhaul.
For those who haven’t reviewed the plan, the high points are: An elimination of the gas tax, an increase of 0.8 percent sales tax and moving transportation funding so that an additional .25 percent of the sales tax goes to transportation. The proposal also sees an increase in car registration fees and a fee for alternative fuel vehicles.
If passed, Virginia would be the first state to eliminate the gas tax … a maneuver which at the least would lure a lot of drivers from across the border to visit Loudoun’s gas stations.
McDonnell is correct that tying transportation funding to the gas tax is problematic. Increased fuel efficiency, the rise of telecommuting and the growing popularity of hybrid cars means that the revenue from this tax is going down. Raising the gas tax is an option, but we would be in the same predicament in the near future.
There will always be those who oppose any additional taxes or revenue for the government. In this instance, we feel these objections are overstated. Road construction and maintenance remain a core service of government and proper road maintenance and planning are necessary for business development and basic public safety.
There are some critics who oppose this shuffling of funding mechanisms because it sends the wrong message and fails to reward those who drive less, drive gas-saving vehicles or work remotely. It’s a valid point, but there are other options to pursue and slowly reduce our dependence on fossil fuels – and quite frankly, right now we want people on our roads. We want the tourism and we want the businesses and their employees. Even in the worst case, it’s better to be stuck in traffic on the way to work than to have no work at all.
It’s certainly an imperfect plan as it stands, but we’ve yet to see what will be changed and altered within McDonnell’s transportation package once the General Assembly gets in on the act. There will likely be compromise on either side – the trick is to ensure that these compromises don’t gut transportation funding or core services in the general fund.
As it stands, the governor’s proposal would dedicate more funds to transportation than it adds in taxes. It’s the potential impact to the general fund – necessary for education, public safety and other services – that has many sitting a little uneasy with the proposal.
For those excited by the prospect of lower prices for gas, remember that the increased sales tax would hit you for every other purchase through the sales tax. It’s unfortunate, but likely necessary. The commonwealth has problems that need to be addressed and they won’t be solved for free. The proposed increase would still leave Virginia with a lower sales tax than D.C. and the neighboring states of Maryland and West Virginia.
All in all, McDonnell deserves recognition for a novel approach that has stuck with us for decades. But while we’re intrigued by the governor’s proposal, one question lingers. Why are we seeing this bold move in his fourth term rather than his first? A pessimist might suppose that the timing serves to leave a successor with the challenge of administrating a challenging transportation funding scheme.
Like current U.S. Senator and former governor Tim Kaine (D), McDonnell has chosen to delay a significant transportation proposal until his last session with the General Assembly. And unfortunately, members of the General Assembly are typically ill-disposed to take this sort of drastic measure the term before the House of Delegates goes up for election. Even if it was the right thing to do, no one wants to face a challenger with a recent vote for increasing the sales tax.
If so, we’ll end up in the same place next year.
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