Now that we are in the Let’s Make a Deal phase of Virginia’s transportation funding debate, it’s the Democrats’ turn to put some trinkets on the table for viewing. And, helpfully, Sen. Creigh Deeds does just that in his constituent newsletter:
Democrats have balked at the Governor’s plan for raiding the general fund of upwards of $200 million a year and for replacing the gasoline tax with a sales tax increase. Some Republicans have opposed any sort of tax increase for transportation. If we are going to be realistic about reaching consensus, both sides will have to give a little. For example, I think the Democrats may consider using general fund dollars for transit and for rail. After all, those forms of transportation are designed to transport a great number of people and have not seen a steady source of funding over the years.
I think we can also develop compromise around a number of proposals made by Senators Frank Wagner of Virginia Beach and John Watkins of Powhatan County. Sen. Wagner proposed scrapping the gas tax for an increase on the wholesale tax at the rack. The Governor’s proposal is dependent on the federal government passing an internet sales tax, which has been defeated twice before. Sen. Wagner’s plan would call for a larger wholesale tax in the event the federal legislation is defeated. Senator Watkins has made similar suggestions. Each of the proposals has components around which consensus can develop.
So Mr. Deeds would use the sacrosanct general fund to fuel transit (which would put buses in competition with school kids). Interesting. But more importantly, it would appear that Senate Democrats are going to go back and pick over the carcass of the Watkins and Wagner bills. Recall that Sen. Dick Saslaw criticized Wagner’s bill because it would have only raised the gas tax by 12 cents per gallon.
So yes, Virginia, the Democrats are, very likely, going to ask for a sizable gas tax increase, either at the pump or wholesale level, and quite possibly both.
And as fate would have it, they picked up an ally in the drive to raise the gas tax — the Virginia Petroleum, Convenience and Grocery Association:
“VPCGA recognizes that a deficit exists in the Virginia Department of Transportation’s budget as the result of slated new construction dollars being shifted instead to road maintenance, as is mandated by Virginia Code. Should this continue, it will eventually impact the productivity of our membership and other Virginia businesses, and affect the quality of life for many Virginians.
To address this, VPCGA supports increasing Virginia’s gasoline tax from 17.5 to 23.5 cents during the 2013 General Assembly session, with the change to become effective on July 1, 2013.
VPCGA recognizes that new federal mandates on fuel efficiency standards will likely result in declining fossil fuel consumption across the Commonwealth over the long term. VPCGA commits to working with all impacted stakeholders in an effort to develop consensus legislation for the 2014 General Assembly session that adjusts Virginia’s cents per gallon rate along the biennial state budget, to accommodate the increase in federal gasoline efficiency standards for all passenger vehicles.”
Why would the petroleum dealers be for a gas tax hike of eight cents a gallon rather than the governor’s sales tax plan?
Because for many gas stations, selling snacks, maps, drinks and whatnot is where their profits come from — not gasoline. A higher sales tax might put a crimp in that business.