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Friday, February 15, 2013

Virginia Senate passed bill to raise gas tax

More state transportation funds are needed for projects to relieve traffic congestion, including roads like Little River Turnpike as shown here.
The Virginia Senate passed a transportation package this week that would generate $900 million in new revenue for annually and enable localities to put in place additional funding to meet their transportation needs. The bill would also raise the gas tax for the first time since 1986.

The Senate legislation differs greatly from a transportation bill passed by the House. A House-Senate conference committee will try to negotiate a compromise.

The Senate plan would:
  • Increase the gas tax by 5 cents a gallon, for a total tax of 22.5 cents and tie future changes to the Producer Price Index.
  • Add a 1 percent sales tax for wholesale gasoline purchases.
  • Allow Northern Virginia and Hampton Roads to impose a 1 percent sales tax at their discretion for local transportation projects.
  • Increase the state sales tax by 0.5 percent and target the new revenue for transportation.
Both senators who represent the Annandale area, and appeared at a legislative town hall in the Mason District last week, voted for the Senate plan. Sen. Dick Saslaw said he supports it because “it takes the necessary steps to create new and sustainable revenue streams to fund transportation projects and adequately maintain our roads.” Sen. Dave Marsden said the plan “represents the first significant investment in our transportation infrastructure in over 25 years.”

The House bill adopts Gov. Bob McDonnell’s proposals to scrap the gas tax and raise the sales tax from 5 percent to 5.8 percent. The House bill would transfer a much larger share of general funds to transportation than the Senate bill. The House rejected the governor’s proposal to impose a $100 fee on hybrid vehicles. Both the House and Senate bills would increase the vehicle registration fee by $15.

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