Conference Committee Report for Transpo Takes Shape

Posted on February 20, 2013 by Chap

But what shape is it?

There is no final agreement apparently on the regional piece.  The statewide piece appears to swap a gas tax decrease with a sales tax increase, both on regular purchases (raised to 5.3%) and on motor vehicles (raised to 4.3%).  Actually the gas tax “decrease” is  a mirage, since the reduction will be restored on January 1, 2015 once the U.S. Congress has fulfilled everyone’s expectations by failing to authorize a state sales tax on Internet sales.  On top of that, it pushes about $200M annually in general funds to transit projects.

The report puts back the Governor’s asinine $100 fee on hybrid vehicles.  Through the regional piece, it also contains a “NOVA and Hampton Roads tax” with a 0.7% regional supplement to the state sales tax.  Usual objections apply.  We’ll be paying a new tax in the urban areas for the same service that others get for free.

How does the money add up?

The statewide piece loses money the first year ($50M), until the gas tax is restored.  Then it picks up revenue from the sales tax and car sales piece.  It eventually raises $700M in annual statewide revenue.  That essentially cures the “cross-over” issue, which has plagued our maintenance funding.

In regard to the regional piece, it is targeted to raise $300-350M annually for NoVA and $250-300M for Hampton Roads.

(ed. note:  my bill which simply raised the existing gas tax by 10 cents would have raised $500M annually, without any other increases.  And it could have been explained without a team of tax attorneys on retainer).

Neither body will vote on this report until tomorrow, at the earliest.

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  • Tess Ailshire

    Why is the $100 fee on hybrids asinine? While these vehicles help the community by producing fewer dangerous emissions, they still use the roads that other vehicles do. Both capacity and maintenance requirements are factors of the number of cars, not how cleanly they burn fuel.

  • Chap Petersen

    That’s true, but hybrids do purchase gas. They just purchase less. And they’re already subject to personal property tax and titling tax, just like any other vehicle. Currently, there is no state which applies a “hybrid tax” such as this. Most do the exact opposite because we’re trying to conserve gas. It’s really unique — and not in a good way.

  • Tess Ailshire

    Two separate issues.

    How much gas a car uses, or how clean it makes the air, is completely irrelevant to the effect it has on roads and congestion. Every vehicle should pay toward that, in proportion to how much ROAD it uses, not in proportion to how much gas. If you want to be honest and want every person/vehicle that uses the roads to pay for the roads, you can’t eliminate some just because they use less of something not in the equation.

    The whole argument against adding sales tax to pay transportation (a good argument, I might add) is based on that – people who use the roads should pay for them.

  • Anonymous

    I agree with Tess but taxing fuels even when you index them merely delays the inevitable of cars getting better and better mileage and paying less and less tax.

    you can charge hybrids today (and I agree with the argument that Tess makes) but it won’t be
    too long before people start arguing over what “hybrid” means is other cars get introduced that get just as good as gas mileage (or better) using some other technology. Then the tax on hybrids will just hasten their demise against competing technologies.

    I personally like the nexus of the fuel tax to the vehicle but it too is doomed – just a longer timetable.