Developing: A “conservative alternative transportation plan”

A new wrinkle in the transportation saga…

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.”

Update 2

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.

Update 3

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.

  • Mike Barrett

    Classic republican nonsense. Here we have one week to go in a yearly legislative session, and we are talking about a transportation initiative that has yet to see the light of day. Could these conservative Senators look any more preposterous? Of course, McDonnell set the tone by coming up with a so called plan two days before the session after his Speak of the House had said that no major transportation legislation would come up this session. Do citizens realize who absurd this makes our Legislature look to the nation and the world?
    Virginia had a reputation for being well led and managed, but that reputation is now toast. The damage to our transportation infrastructure cannot even with calculated, but we can see it in the condition of our roads, bridges, tunnels, and interstates. Someday our children will need to fix this mess created by Speaker Howell and his no tax republican caucus, and it will be expensive, disruptive, and damaging to our ability to continue economic development.
    But the damage has been done by these spendthrifts who will say they saved up money, but the truth is, they have cost us billions. Fire the bunch.

    • Xerxes

      LOL! You are such a loser. And a liar too

  • A $100 annual fee on hybrids and alternative fuel vehicles? Are you kidding me? How can that clear the bar of equal protection under the law? I made an informed decision to purchase a hybrid, which cost me about $3,000 more than the traditional model, and now the state isn’t making enough money from my gas tax so you’re going to charge me a fee that isn’t equally applied to my Expedition-driving neighbor? Am I the only one who thinks this stomps all over the limits of reasonableness?

  • DJRippert

    Republicans, repeat out loud, “Inflation exists. Inflation exists. Inflation exists.”.

    The number one problem with transportation funding in Virginia is that our General Assembly does not believe that inflation exists. Hence, they have held the statewide gas tax at 17.5 cents per gallon since 1987.

    How would you feel if you earned the same salary today as you earned in 1987?

    Of the 50 US states, Virginia has the second longest frozen gas tax. Only oil drenched Alaska has kept their gas tax frozen longer.

    Yesterday, the Texas Transportation Institute issued its annual congestion report. Generally, hours wasted per commuter per year tracks with the population in an MSA. For example, the worst five MSAs were the 7th, 1st, 10th, 3rd and 4th most populous MSAs in the United States.

    Virginia fared poorly in this analysis. Virginia’s biggest MSA – Washington, DC – was the most congested MSA but the 7th biggest in population. Virginia’s next biggest MSA – Virginia Beach, Norfolk, Newport News is the 31st worst in congestion and the 36th most populous MSA.

    Hampton Roads is feeling the pain. In 1982 Hampton Roads was the 38th most congested MSA. Now, it is #31. This is true despite the fact that Hampton Roads is shrinking on a relative basis (i.e. dropping on the list of most populous MSAs). In 1980, the Hampton Roads MSA was the 31st largest in the US, in 1990, the 28th, in 2000, 31st, in 2010, 36th.

    Why is Hampton Roads moving up the list of most congested MSAs while moving down the list of most populous MSAs?

    Because inflation exists – even if the dimbulb Republicans in the General Assembly would like to think otherwise.

  • Scout

    I find it difficult to discern why the Newman plan is any more “conservative” than is the Governor’s. I guess it’s just another example of Gresham’s law at work with political labels. These things have no meaning any longer. They are just marketing gizmos.

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