Gas tax alternatives

A couple of new ideas have been floated to address the state’s road money woes. One recycles an old idea — a regional referendum — that went down in flames a decade ago. Another, which would scrap the gas tax entirely and replace it with an increased sales tax, would bring an end to the old idea that the gas tax is really a user’s fee.

The latter idea comes from Del. Tim Hugo. It would seek to:

…eliminat[e] the state gas tax of 17.5 cents per gallon and replacing it by increasing the state and local sales tax from 5 percent to 5.9 percent.

Del. Timothy D. Hugo says his proposal would make Virginia the first state to scrap its gas tax. His bill also would allocate an additional 0.5 percent of the undesignated state retail sales tax revenue to the Commonwealth Transportation Fund.

Hugo outlined this idea to me earlier in the month and I’ve seen a draft working paper on this as recently as two weeks ago. The goal is one of those legislative holy grails — revenue neutrality. Maybe it is, maybe it’s not. The one thing it absolutely does is end the idea of fuel taxes as user fees and make the state’s sales tax even more regressive. Regardless, this approach will face tough opposition…and might possibly open a Pandora’s box if it survives.

The regional referendum proposal is a retread:

Del. Chris Stolle, R-Virginia Beach, submitted legislation calling for a regional referendum in Hampton Roads. Voters could choose whether to back a 1 percent sales tax increase to boost road funding in the region by $175 million to $195 million annually. Sen. Jeff McWaters, R-Virginia Beach, is introducing companion legislation in the Senate. In 2002, voters in Hampton Roads and Northern Virginia rejected such a regional approach.

As noted earlier, Hampton Roads residents defeated such a proposal a decade ago. Opposition to the Northern Virginia version helped launch the political career of one Ken Cuccinelli. But that was then, this is now and, surely, everything is different now, right?

In his morning email, Democratic strategist Paul Goldman suggested that the referendum be statewide (though such a referendum would only be advisory). Paul believes it’s time to trust the people on this one, and, if given the chance to voice their opinion on a gas tax, they would say “raise it.”

That bit of projection aside, Goldman notes that neither Mark Warner nor Tim Kaine like referendums, and neither does the Democratic leadership in the General Assembly. But looming over all of the ideas is Speaker Bill Howell’s sentiment that there just might not be enough time in this short session to address transportation funding at all.

Until all those who clamor for more road money can overcome Mr. Howell’s doubts, their plans aren’t worth the paper they are printed on.