Tuesday, November 13, 2012

Richmond Planning Commission proposes a state gas tax indexed to inflation


Attempting to address Virginia’s growing list of transportation needs and seemingly shrinking funds to pay for these line items, the Richmond Regional Planning District Commission[1] (RRPDC) included a proposal in its legislative agenda that proposes state legislators index Virginia’s gas tax to the rate of inflation to cover the costs of Virginia’s transportation needs.

The RRPDC is composed of 33 officials and Virginia residents from 9 Richmond-area localities.[2]
Virginia’s 17.5 cent tax on gas has stayed the same since 1986, remaining lower than any of Virginia’s neighboring states.

According to the RRPDC’s chairwoman and mayor of Ashland, Faye O. Prichard, “The math just doesn’t work. The state runs out of road funds in 2017. It’s a quality of life issue, and it’s an economic development issue.”[3]

Some state legislators, like Sen. John Watkins (R-Powhatan), also think indexing the gas tax is a good idea. During the last session of the General Assembly, Watkins tried to pass such a measure before it was killed in the lopsidedly Republican House of Delegates (i.e., the House of no new taxes).

Watkins informed his legislative brethren that if the gas tax had been indexed for inflation 26 years ago, it would have gained Virginia an additional $1.2 billion in revenue for transportation.

What’s more, a higher gas tax could cut down on the amount of travel by Virginians, reducing the stress on Virginia’s roadways as well as reducing the amount of greenhouse gases that Virginia’s vehicles release.

However, indexing the gas tax to inflation would also disproportionately hurt the most economically disadvantaged residents of Virginia.

No matter what route Virginia’s legislators take to raise money for transportation, there won’t be many easy decisions. There are going to be winners and losers. So the issue should really be how those winners and losers can be spread out across a broad spectrum of socioeconomic groups.

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