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To fund transportation, House panel OKs McDonnell's proposal to scrap Virginia gasoline tax, increase sales tax, hike vehicle-registration fees
The bill doesn't address tolls, something McDonnell can pursue without legislative approval. But amendments to the bill Wednesday include language that says McDonnell would back off plans to put tolls on Interstate 95 if the General Assembly passes his transportation bill.
"If we have this new source of revenue, he isn't going to need those tolls," Howell said after the committee met.
Another amendment would let drivers of diesel-fueled passenger vehicles apply for a tax credit for the amount of gas tax they'd still be paying--McDonnell's bill keeps the state tax on diesel because it's primarily paid by commercial truckers.
It also uses some general-fund money, something Democrats dislike.
But one sticking point going forward, particularly between the House and Senate, may be the elimination of the gas tax. Many lawmakers in both parties feel the gas tax is a user fee, and don't want to abandon it entirely.
McDonnell proposes doing so because the state taxes gas at a flat rate of 17.5 cents, meaning it doesn't grow with the economy. Better fuel mileage and the growing niche of alternative-fuel vehicles are also cutting into gas tax revenues.
Howell said indexing the gas tax or putting a sales tax on it still doesn't solve the problem; he feels the gas tax has little future as a viable revenue stream.
"I don't see the need for a gasoline tax; I think the sales tax is much more preferable," he said Wednesday.
Opponents of McDonnell's bill--and some lawmakers still on the fence--argue that the sales tax is paid even by those who don't drive, and will hit lower-income Virginians while largely exempting out-of-state travelers passing through.
McDonnell's bill doesn't please all Republicans; several on the committee, including Del. Mark Cole, R-Spotsylvania, voted against it. "I was just concerned about the provisions of it," Cole said afterward. "I'm not sure getting rid of the gas tax is a good idea."
He said he understands that Howell and McDonnell are trying to craft something to please the more conservative House and more moderate Senate. But he would have liked to have seen a more revenue-neutral bill.
Del. Bobby Orrock, R-Caroline, voted for the bill.
In a statement, McDonnell called the House committee vote a "first positive step forward."
"This first vote clearly demonstrates a growing, and bipartisan, consensus that transportation is a core function of government and our investments in building and maintaining our highways, transit systems and railroads is of utmost importance to the citizens of Virginia," McDonnell said.
Chelyen Davis: 540/368-5028