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Old 01-11-2013, 04:13 PM   #42
Indocti Discant
Scooby Specialist
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Join Date: Jan 2007
Chapter/Region: BAIC
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VA has an interesting plan. Drop all state gas taxes and replace it with a 0.8% sales tax.

In Virginia, controversy is a-brewin' over Governor Bob McDonnell's plan to eliminate the state's gasoline tax. The funds generated from that tax have traditionally been earmarked for maintenance and construction of Virginia's roads.

To replace gas tax revenue, McDonnell plans to do three things: (1) raise the state's sales tax by about 16%, (2) increase vehicle registration fees, and (3) siphon off money from schools, mental health programs, and public safety initiatives.

Which is to say, he's planning to start a fight with elected officials on both sides of the aisle.
On the right, many groups take issue with McDonnell's plan to rely on sales taxes for roadway funds. The Competitive Enterprise Institute, a libertarian think tank, says that McDonnell is correct when he insists that the gas tax is stagnating. However, CEI also points out that the gas tax may be the most accurate gauge of road usage and therefore, the best source of revenue.

CEI's Marc Scribner insists that "New vehicle fleet and driving trends are quickly rendering the fuel tax obsolete. But abandoning the user-pays/user-benefits principle, which has long guided transportation funding in the United States, is not the answer." Instead, he says that "[s]trengthening the user-pays principle through all-electronic tolling and other mileage-based charges is the most prudent and fiscally conservative approach."

Translation: the people who use roads should pay for their upkeep, and money should be collected from those folks via tolls and other charges, based on how far users drive.

On the left, McDonnell is likely to face opposition from Democrats, who have often been very uncomfortable taking funds from education, healthcare, and other public/social services to pay for transportation infrastructure.

In the middle, we find the Washington Post, which agrees with McDonnell that the gas tax is an inadequate source of revenue for roadway maintenance, but also points out that his plan to rely on sales taxes and money pilfered from other state programs won't meet the anticipated costs. On average, the pricetag for maintaining and constructing new roads in Virginia is about $1 billion per year; McDonnell's new plan would only generate about $600 million.
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