Va. transportation plan: no gas tax, higher sales tax

[mstone]

@lordofthemark 40085 wrote:

http://blogs.roanoke.com/dancasey/2013/01/your-thoughts-on-mcdonnells-abolish-the-gas-tax-scheme/

‘From the governor’s email:

“That’s right, no more gas tax at the pump. No sales tax at the pump either. When this plan passes the price of gas will go down, and Virginians will spend $3.5 billion LESS at the pump over the next five years.’

Drivers of cars and light trucks (diesel is another matter) will no longer pay anything (other than the car tax) directly for the roads they use (except where they are tolled) they will pay the sales tax on items OTHER than gasoline, same as any non motorist.

Wow. I was assuming that gas would just get a regular sales tax–this is even more looney than I dreamed possible. And I drive a diesel car. 😡

[culimerc]

It sends *all* the wrong messages. It makes owning a gas guzzler cheaper. Fuel efficiency becomes less important, in turn, increasing our consumption of gas from countries with questionable foreign and domestic policy. There is less incentive to be concerned about the CO2 emissions, your not paying for your roads, as has been previously mentioned. It penalizes technological advancement, by taxing diesel, hybrid, CNG and fuel cell engines more. The sheer idiotacy on this elimination of the gas tax is mind boggling. The gas tax in Va is one of the lowest in the country and hasnt been raised in over 20 years. Rather than eliminated it should be increased, potentially based on region. Higher in the more urban areas where incomes tend to be higher and traffic tends to be denser. That would incentivize using alternative transportation, lower wear and tear on the roads etc etc etc. All while not penalizing those who live in areas where distances between destinations are significantly larger.

[baiskeli]

@lordofthemark 40085 wrote:

http://blogs.roanoke.com/dancasey/2013/01/your-thoughts-on-mcdonnells-abolish-the-gas-tax-scheme/

‘From the governor’s email:

“That’s right, no more gas tax at the pump. No sales tax at the pump either. When this plan passes the price of gas will go down, and Virginians will spend $3.5 billion LESS at the pump over the next five years.’

Drivers of cars and light trucks (diesel is another matter) will no longer pay anything (other than the car tax) directly for the roads they use (except where they are tolled) they will pay the sales tax on items OTHER than gasoline, same as any non motorist.

Thanks!

That’s really screwed up. It makes no sense to me. No surprise coming from McDonnell though.

[PeteD]

@culimerc 40113 wrote:

Rather than eliminated it should be increased, potentially based on region. Higher in the more urban areas where incomes tend to be higher and traffic tends to be denser. That would incentivize using alternative transportation, lower wear and tear on the roads etc etc etc.

Terpfan alluded to this, so I spent some time looking:

TFA: http://www.transportation-finance.org/pdf/featured_documents/nchrp_20_24_62_virginia.pdf

“After years of controversy, the political compromise that moved HB3202 was that local governments in Northern Virginia and Hampton Roads were authorized to levy taxes—the philosophical principle had been maintained.

The balance of the bill was put to rest when the State Supreme Court declared the legislation as unconstitutional because it gave taxing authority to regional authorities composed of both elected and appointed officials. Virginia’s constitution requires any tax increase to be levied by elected officials.”

Looking at http://www.fairfaxcounty.gov/fcdot/cdot/funding/hb3202.htm, it does seem that (at least in Fairfax) there were no proposed increases in the gas taxes involved in HB3202.

[Terpfan]

Yep, the Courts shot it down. Sad too, given I think politically it was a feasible solution.

I don’t envy those in the transportation field since they’re hit on so many angles. I mean, what may make revenue sense doesn’t necessarily make environmental sense, which in turn may not make sense for easing congestion. Sort of a damned if you do, damned if you don’t.

I honestly don’t think the gas tax is all that effective for raising revenue given the price of gas, potential use of cheaper fuels (nat gas, hydrogen cells, etc), and efficiency of vehicles. Alternatively, it’s tough to find a “fair” alternative. The closest I can think of sans a regional approach, is a per mile tax (would have to be recorded though since you wouldn’t be paying for out-of-state driving) coupled with some sort of formula for farebox recovery that fluctuated with increased use/cost of mass transit. I also think this has zero chance of pass.

Long as they don’t try to double-tax my bike, I will be fine.

[mstone]

I don’t understand why people keep hand-wringing about the impact of alternative fuels on gas tax revenue. It will be at least a generation before any of those technologies make a dent in the number of gas burners on the road, and most are in the “not likely” category. In 30 years a whole lot of things will be different, and trying to guess which tax policy will work then to fix today’s problems is just a distraction.

[PotomacCyclist]

It’s not just the alternative fuels. Hybrid vehicles don’t use alternative fuels but they do cut down on petroleum consumption.

[mstone]

@PotomacCyclist 40147 wrote:

It’s not just the alternative fuels. Hybrid vehicles don’t use alternative fuels but they do cut down on petroleum consumption.

Not that much. The real policy value to hybrids is in reduced emissions for city/congested driving. On a hybrid SUV (which don’t really sell all that well) you’re looking at what, maybe 25% reduction in fuel consumption in 15 years? Gas prices have increased by what, 400% or so over that time? Note also that in the early 80s you could buy a cheap car that could get upwards of 40MPG. Fuel economy went down due to emissions controls–does that mean we owe people a rebate on their gas tax? This isn’t an exact science, it’s nothing more than a simple and practicable approximation. Index to inflation, and we’re probably good for decades. It’s not like the gas tax has ever covered all costs related to roads, it’s just a way to get a significant revenue stream that’s roughly related to usage. Yes we’ll still have to supplement from the general fund, BFD. If and when the technology to charge for miles traveled becomes practical, then we can figure out how to switch to some kind of more accurate mileage/weight based usage scheme. We might even have self driving cars by then, which could make that problem trivial. It’s not something we need to worry about for funding the current infrastructure deficit, and trying to push the technology before it’s ready will just end in failure.

[PotomacCyclist]

I’m not arguing in support of the $100 alternative fuels vehicle fee. I’m pointing out the supposed rationale behind it. I’m not comparing the gas price increase either. That’s mixing up different points.

I don’t think the high fee is useful either, but there has been a lot of general discussion about the decrease in gas tax revenue from increasing hybrid use. (I’m not saying that the gas tax would be sufficient either way, without some sort of increase such as inflation-indexing.)

As for the per-mile idea, it could work in theory. But practically (politically), it’s a dead idea. Too many people will scream about privacy rights, whether those concerns are valid or not.

Congestion pricing would also be a tough sell. But at some point, people will get so frustrated at being “stuck in traffic” that they might be able to tolerate such a system.

I continue to be surprised by how many people complain about rush hour congestion and gridlock while sticking to their habit of single-occupancy driving. At the same time, they voice their disapproval at other options, such as improved commuter buses, mass transit and so on, as a voluntary alternative to single-occupancy vehicle commuting. I’m not adding cycling or walking into this part of the equation because many of the people screaming about this sort of thing have longer commutes. Most people probably won’t commute by bike if it’s more than 5-10 miles. A few will, but not enough to make a dent in traffic between, say, Loudoun and D.C.

That’s not to say that biking and walking aren’t important for shorter trips, especially in the more densely populated suburbs like Arlington and Alexandria.

If this proposal forms the basis for a new funding plan, at least I hope they change it so that gas will at least be subject to the general sales tax. It might be less than it was before, but at least there will still be a loose connection between car driving and transportation funding. The more I think about it, the less it makes sense to remove the gas tax completely.

[JeffC]

I read the WP article and some others before it. Remember when McDonell was running for governor and his plan, in part, was to privatize the VA ABC and use the proceeds on roads. I was very enthusiastic for him then as VA ABC has terrible selection and is horribly overpriced (compared to MoCo and DC) but brings a ton of money to VA. Remember where his idea went there? Nowhere. This is probably where his latest idea will go. Sadly it is ok there for him to sacrifice conservative ideology on the VA ABC when it is expedient.

I see that McDonnell is in part trying to be the least offensive as possible to Grover Norquist and his crowd. I know they met before the latest “plan” was released in an attempt for the “plan” to be sanctioned under Norquist’s convoluted logic. Abolishing the gas tax seems like good window dressing when the sales tax is being raised. Overall though I am also struck by the intellectual incoherence of the plan. Moreover, it relies on potential revenue from an internet sales tax which may, or may not, come to fruition. This was probably another attempt to come up with a “plan” that would pass muster with the Norquist crowd since the additional revenue would have come from a Federal law and not a tax increase done at the VA state level. Overall, McDonnell could point to what was done in VA and say it was revenue neutral with the sales tax increase washing with the gas tax elimination. If you are doing VA prepaid college tuition for your kids, you’ll know how badly VA is cutting back support there and everywhere else. The thought of more general fund cuts when VA only provides 13% of public university costs (down from 40% not too long ago) is scary.

I am fine with car fees being increased. Heck if there were serious fees on bikes that went directly to things like improving bike only trails, I would gladly pay for that.

Some generally seem to find sales tax increase regressive but fail to see tax benefits provided to wealthier people as another form of regressive tax policy. If the government (state or federal) gives incentives such as refunds or preferential HOV usage to “Clean” vehicles, this directly benefits people that can afford a new Toyota Prius, like the wealthy burghers of close in DC burbs, while the rest of us poorer folk drive 14 year old Accords and ride our bikes. In many cases newer cars with great mileage say a Honda Civic might not pollute that much worse than a hybrid, especially when the hybrid is running on gas not batteries at a particular moment. The HOV benefits I find especially galling. HOV benefits should be there for those who make sacrifices to share and thus get cars off the road. Wealthy folks that can afford to trade in older cars for a new Prius and drive alone are not deserving of HOV prefererntial treatment in my view anymore than a poorer person should be subject to a regressive sales tax increase.

The roads are so bad in Virginia compared with what I see in California, even the poorest parts of California that I visit frequently. I have read that payment for roads in VA is done at the state level and that the rural areas benefit from not having to pay for roads which are generally in better condition due to less frequent usage as compared with the wealthier, more urban parts of VA which could afford to pay directly for their own roads (an earlier approach mentioned in this thread) and where the roads see much more usage. This seems like another instance of a rural vs urban type battle.

I think McDonnell is desperate to be seen as doing something to improve transportation in VA. The poor infrastructure is a big problem as VA tries to position itself as an attractive place to do business

[jabberwocky]

@mstone 40152 wrote:

Note also that in the early 80s you could buy a cheap car that could get upwards of 40MPG. Fuel economy went down due to emissions controls–does that mean we owe people a rebate on their gas tax?

Vehicle weight was the real culprit. All the new crash testing vehicles have to pass these days makes them safer, but considerably heavier. Sub-2000 lb cars were common in the late 80s/early 90s, but these days almost no cars are (even the tiny smart cars are 1800 lbs).

[Author]

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