The 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.
