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GOVERNOR PROPOSES ELIMINATING GAS TAX page 3


 Virginia Gov. Bob McDonnell gestures as he talks at a news conference in Richmond on Tuesday about his proposal to eliminate the state gasoline tax in return for an increase in the state sales tax to fund transportation needs.
BOB BROWN/RICHMOND TIMES-DISPATCH
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Date published: 1/9/2013

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"I thought it was a good, balanced plan," Howell said.

He said he likes converting from the gas tax--which he called a "dinosaur tax"--to a sales tax.

Howell said he can't say how his House Republican caucus feels about the bill, as they were only briefed shortly before the press conference.

"I really hope we'll be able to convince the majority," he said.

Those anti-taxers who listen to Americans for Tax Reform's Grover Norquist may not be convinced: Norquist put out a statement Tuesday afternoon saying the sales tax increase is too much and there isn't enough shift from the general fund for transportation.

Norquist also wants to see the plan eliminate the diesel fuel tax as well, and call the new car registration fees "taxes" and include an accompanying tax cut.

A number of business organizations, like the state Chamber of Commerce, attended McDonnell's press conference and are supporting his bill. Business groups have been pushing for transportation reform for years, arguing that congestion in Northern Virginia and Hampton Roads are hampering economic development.

"We can't wait another year, we've got to act now," said state chamber president Barry DuVal.

Del. Vivian Watts, D-Annandale, told reporters after the press conference that McDonnell's bill may provide statewide transportation help but does nothing for the regions--like Northern Virginia--with true transportation problems.

She would like to see additional regional proposals, she said.

"It's not enough money," Watts added, saying that under McDonnell's proposal, Virginians will bear more of the burden of transportation costs, instead of out-of-state visitors.

Chelyen Davis: 540/368-5028
Email: cdavis@freelancestar.com


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Eliminate the current 17.5-cents-per-gallon motor fuels tax on gasoline; retain it on diesel fuel. State motorists will still pay the 18.4-cent-per-gallon federal gasoline tax.

Replace the current gas tax with a 0.8 cent increase to the sales and use tax dedicated to transportation: Under the governor's plan, 85 percent of the increased sales tax will go to the Highway Maintenance and Operations Fund and 15 percent will go to the Transportation Trust Fund.

Combined with cutting the gas tax, that's projected to generate $24.6 million in 2014, $607 million over five years.

Dedicate an additional 0.25 cent of the state's portion of the existing sales tax to transportation maintenance.

Transportation currently receives 0.5 cent of the sales tax, and the governor proposes to phase in this share to 0.75 cent over five years. During the first three years up to $300 million will be committed to the Dulles Metrorail Extension Project.

That's projected to generate $49 million in 2014, $811.5 million over five years.

Increase vehicle registration fees by $15 (currently $40.75 per year on the average passenger vehicle) and dedicate the revenue to intercity passenger rail and transit. That's a 37 percent increase in the registration fee.

Projected to generate $109.4 million in 2014, $547 million over five years.

Impose a $100 annual fee on alternative fuel vehicles, dedicate the revenues to transit.

Projected to generate $10.2 million in 2014, $66.6 million over five years.

Expected revenue from passage of federal law on collecting sales tax on Internet sales:

Projected at $175.7 million in 2014, more than $1 billion for the state over five years, to be devoted to transportation and public education.