The gas tax blues
By Norman Leahy | Monday, October 3rd, 2011 | Policy, VirginiaThe Virginia Beach city council is contemplating asking the General Assembly to raise the state’s gas tax a dime a gallon, on the belief that it will pump an extra $500 million per year into VDOT’s coffers. The move will please editorial boards around the state, and greatly irritate anti-taxers who dislike any sort of tax increase. It would also, if the math is right, reap 10 times the amount of money the Governor proposes to raise through tolls on I-95.
The reasoning for a tax hike is simple: it hasn’t been raised since the mid-1980s, and its purchasing power has greatly diminished. Maintenance and new construction have fallen behind demand, which hurts the state’s economy and dulls its competitive edge. Plus, more fuel efficient cars use less gas, which means less tax revenue. And so, at least in some parts of Virginia, drivers sit in traffic rather than spending their time more productively or pleasurably.
The case against any hike is even simpler: it’s a tax increase, which is bad. One doesn’t raise taxes during a recession, and especially a tax that falls hardest on the poorest. Moreover, VDOT has a rotten record spending the money it already has (which has only gotten worse during the economic slowdown).
It is highly unlikely the General Assembly will raise the gas tax. However, if it should decide to do so, let’s set a few ground rules, shall we?
* Place the transportation trust fund off limits to General Assembly raids. Constitutional amendments to do so have been introduced, but have failed, because Democrats and Republicans can’t agree on the particulars of how it would all work. And remember that then-Gov. Kaine promised he would introduce and back such a measure before trying to raise fuel taxes (he failed on both counts). Still, build the fence, erect the wall, put the fund in a lockbox and hide the key.
* End the Byrd system. VDOT’s current model insists on the state paying to maintain local roads. This isn’t just inefficient, it’s insane. Harry Byrd is dead. It’s time to put his road agency in the urn along with him and replace it with one that puts the responsibility for local roads in local hands.
* Stop using gas tax revenues to pay for mass transit. This is a wealth transfer, plain and simple. Worse, it breaks the implicit contract between the drivers and the government that their gas taxes will be used to maintain roads. It’s time for transit to pay its own way and stop leeching off the guy stuck in traffic.
Do these things and then raise the gas tax all you like. But attach a sunset provision to the hike. Then, after after two, five or seven years, it has to be revisited to see if the extra money — if it indeed materializes — has made a difference.
Little, if any, of this is likely to happen either.
But for the evil geniuses among us, there is one area where Virginia could generate substantial new monies on each gallon of gas sold without raising the headline tax rate: new fees.
Yes, fees, those things the General Assembly managed to increase on any number of things in order to make the state’s books balance back in 2010. The gas tax is, itself, a user fee, but that hasn’t stopped other states from discovering that a single user fee isn’t enough. Looking at this chart, we see that Virginia is a piker when it comes to fees added to each gallon of fuel. Why look at those sneaky Floridians…a four cent gas tax, but 30 cents per gallon in fees. Or how about New York? Just 8 cents per gallon in tax, but a whopping 39 cents per gallon in fees.
Virginia has a small fee attached to gas, but part of that is collected only in Northern Virginia. Pish tosh. If our roads are really just a cut above the rutted tracks of yesteryear, then fees are the way to keep the wagons rolling.
Anti-taxers get to keep the lower headline rate. Tax-philics get the money they crave. Politicians get to say they haven’t raised taxes, only fees that apply to a small universe of users (who are too dispersed and politically impotent to make a difference anyway).
Everyone is happy. Except the poor sap who has to fill the tank each week.
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About the author
Norm Leahy has written about Virginia and national politics online since 2002, beginning with One Man's Trash (OMT), and continuing through Bacon's Rebellion (both the blog and the e-zine), Sic Semper Tyrannis, NBC12's Decision Virginia, Richmond.com and Tertium Quids. He is the chief blogger at "The Score" and a producer of "The Score" radio show as well as being a Washington Examiner contributor.
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Comments
11 Responses to "The gas tax blues"
Way to go Norman; you effectively changed the subject, which is the only way conservatives can avoid the inescapable conclusion that they have made an absolute mess of a transportation network that worked quite well before they took it over. You enumerated some of the points in the republican playbook to attempt to justify the damage the republicans in the House have done, but with those who have not been smitten by obfuscation, the conclusion is clear; republicans value reelection more than doing what is right for Virginia. Someday, a majority will summon up the courage to throw the bums out of office, but by then, we may have had to go back to riding horses across greenfields because the bridges will have collapsed, the roads will be closed, the tunnels will have all flooded, and the interstates turned into cornfields. But hey, the fuels tax rate will have stayed the same!
I can’t agree more,
Localities, the states, and the Federal Government should stop building and maintaining roads. We need to shrink the size of government by selling off all our transportation system and let private businesses build and maintain them. They have no right to my tax dollars and frankly I feel it’s unconstitutional.
Eliminate the subsidy to mass transit like high-speed rail, LRT and bike paths, we’ll have more than enough money to fix roads. And possibly improve them.
Eliminate the subsidy to the auto industry:
We should not subsidize the auto companies, make them build and maintain their own roads. It’s in unconstitutional to do so. Not to mention how much a more money is spent on roads than all the other forms of transportation. Stop taking away my money!
Try the decaf, Mike.
As for the idea of selling off roads because some happen to feel they are unconstitutional…you really need to go and read the Constitution more carefully.
Thanks for the suggestion Norm. I also think Tor had his tounge firmly implanted in his cheek.
No great Commonwealth, or for that matter, nation can long endure with politicians who simply lie to their constituents like have our Delegates in the House. They know the deplorable condition of our roads, bridges, and tunnels, heck, the Governor and this Secretary of Transportation have so agreed, yet these bozos fail to act. Collectively, on this issue, they should simply be ashamed of themselves, and my experience is that they are so embarrassed and ashamed that they avoid any group or association that wants to know why they allow this condition to exist. Especially here at the Beach, when our major industry clusters are transportation dependent, their lack of support for a dedicated source of funding for transportation is simply astounding.
Remember the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (a.k.a., the 2010 Tax Relief Act), here are some taxes that expired this year and could be responsible for some lowering of fuel prices… or the producers and middlemen could be pocketing the difference:
Airport and Airway Trust Fund excise taxes
Three taxes expired on March 31, 2011:
All but 4.3 cents-per-gallon of taxes on noncommercial aviation kerosene and noncommercial aviation gasoline
(The 4.3-cents-per-gallon rate is permanent.) (Sec. 4081(d)(2)(B))
Highway Trust Fund excise tax rates
Federal Excise taxes expired on September 30, 2011 for:
All but 4.3 cents-per-gallon of the taxes on highway gasoline, diesel fuel, kerosene, and alternative fuels (Secs. 4041(a) and 4081(d)(1))
Reduced rate of tax on partially exempt methanol or ethanol fuel (Sec. 4041(m))
Tax on retail sale of heavy highway vehicles (Sec. 4051(c))
Tax on heavy truck tires (Sec. 4071(d))
Annual use tax on heavy highway vehicles (Sec. 4481(f))
Instead of raising new taxes, can’t the State figure out to capture a portion of the expiring Federal taxes, reduce the price of fuel and make this a net positive for Virginia consumers?
If something has been passed in the dead of night or has been cloaked in the deep dark recesses of one of the 2000+ page bills and makes this OBE, then never mind.
End airline subsidies!
Make airlines and airplane manufacturers pay for their own airports, security, and the FAA. NO MORE TAXES!!!!!
Why should the Federal government be paying for any of that with my tax dollars. That is my money. It’s Unconstitutional to take my money to subsidize the airlines.
Politicians are so predictable! With the entire general assembly state election sighted for this November, the issue of raising the gas tax compounded with the Governor’s efforts to place tolls on our highways and by-ways is a non-starter. What it will provide however, is the ability of our spend thrift guided City Council to finger point blame on the Commonwealth for the city’s local transportation inadequacies. Wouldn’t it be refreshing if City Council would work as hard for citizens and constituents rather than governmental bureaucrats and developers?
End public-private partnership subsidies!
Make crony capitalist pay for their own living because they suck at what they do anyway. Maybe people with brains and real solutions will make a buck instead of the well connected.
Since the average motorist in Hampton Roads pays about $100/year in gas taxes, anyone who tries to make the case that we are taxed to death is clearly delusional. Fact is, that payment is so low that it threatens our economic viability, it threatens our status as the 36th largest metropolitan region in the country, and it threatens our ability to retain the Navy/DoD, a viable Port, and a visitor industry that contributes billions in revenue to our region.
All this risk, and our Delegates refuse to act in our interest. As a result, we will now have to pay outrageous tolls so international conglomerates and their investors can get a great return on their investment while it bifurcuates our region, slows our economy, recreates parochialism among cities, and threatens even local maintenance of roadways and bridges. All this because the naysayers won’t pay a few dollars more per week in gas tax. Unbelievable.
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