A new wrinkle in the transportation saga…
— Mark Obenshain (@MarkObenshain) February 4, 2013
More details as they come in to us.
Update: Statement from Ken Cuccinelli
The AG has issued the following statement:
“I appreciate Governor McDonnell’s forthrightness in approaching this issue during this session.
Today, Senate Transportation Committee Chairman Steve Newman is advancing an alternative that I believe has the best chance to get the votes needed to make improvements to Virginia’s transportation system, and I hope legislators will join together to advance Senator Newman’s alternative.
“The proposed sales tax on gasoline will replace a gas tax that is no longer the best means of raising revenue for transportation. Vehicles are more fuel efficient today than in years past and, therefore, generate less revenue per mile driven through a gas tax that is today a fixed 17.5 cents per gallon, even while we wear out our roads. Gas tax revenues do not rise with inflation, and they automatically decline when Virginians make the desirable choice to drive more fuel efficient vehicles. The proposed sales tax, in contrast, will track up with inflation. I am comfortable with this proposal setting the current sales tax rate on gasoline at a revenue-neutral level.
“Once again, I thank the governor and Senator Newman for their leadership in taking a large step toward resolving a very significant problem that has plagued Virginians for too long. Of course, even after this session is over, it will be important to continue to work for other ways to improve transportation in Virginia.”
The details are still unclear, but this offers a bit more clarity:
Sen. Steve Newman, R-Lynchburg, has filed an amendment to the governor’s bill. While the full text of the amendment wasn’t available Monday afternoon, the amendment apparently would apply a 5.5 percent sales tax on gas, removing the 17.5 cents per gallon tax that currently is on gas.
That’s far from the governor’s hope to eliminate the state gas tax almost entirely and replace it with a sales tax. The amendment reportedly removes McDonnell’s proposed increase in the sales tax and the higher vehicle registration fees he had included in his bill.
Democratic leader Dick Saslaw says this approach “ain’t getting us squat.” Rather, he prefers the Watkins proposal to impose a 5 percent tax on gas at the wholesale level, which could raise pump prices around 14 cents a gallon.
The words Jim Bacon wrote at the time of this idea are still true:
Watkins’ plan, like all the others made public so far, would perpetuate the system in which transportation projects are determined by rent-seeking, political log rolling and ideology, not demonstrated need. Indeed, by creating a new source of revenue and superficially “solving” the problem, the proposal would ensure that nothing changes.
More details of the Newman plan…
Newman, the chairman of the Senate Transportation Committee, has proposed scrapping McDonnell’s proposals to increase the sales tax from 5 percent to 5.8 percent , increase vehicle registration fees by $15 and impose a $100 annual fee on hybrid and alternative fuel vehicles. Newman’s substitute plan would impose a 5.5 percent sales tax on the wholesale price of gasoline, which would replace the 17.5 cents per gallon excise tax that is now levied at the pump.
“It doesn’t raise quite as much as the governor’s bill, but I think the governor’s bill always would have lost the fees, and that would have brought it much closer to what this bill would end up being,” Newman said.
Newman said the fees had “become problematic for the left and the right.” And, he said, “keeping the nexus with gasoline” appears to be important to senators in both parties.
Okay, interesting. Or so it is right up until we learn this:
But both plans count revenue that the state could generate only if Congress passed legislation that would give states greater ability to compel online retailers to collect state sales taxes. McDonnell projects that Virginia could collect $1.02 billion for transportation over five years if the act is passed.
Ah yes — the smoke and mirrors.
Counting this money — on laughable projections of the possible revenue from a bill Congress has not even debated — is ridiculous.
This amendment, then, is neither much of an alternative, nor conservative.