Reason for opposing a general sales tax for transportation:
Of the many bills that have been introduced in the General Assembly this year in an attempt to address transportation funding, Governor McDonnell 's bill is attracting the most attention. Abolition of the gas tax, as the governor proposes, moves the state in the wrong direction. It shifts the funding burden disproportionately by replacing the lost revenue with a sales tax increase to be paid on most purchases by all citizens, whether or not they use the highways. The right direction is to tax those that use the transportation infrastructure in proportion to the cost of providing service to them. The fuel tax is the closest approximation at the present time.
The state could consider a mileage tax for vehicles in the future, and that tax could be scaled according to weight of the vehicle. A transportation study conducted by consultants for VDOT showed that trucks receive a subsidy from the state of 9.5 cents per mile. Furthermore, citizens would be unlikely to see a 17.5¢ per gallon drop in gas prices at the pump, even though the Governor’s plan would exempts gasoline from sales tax. Rail Solution believes that pump prices would tend to remain at levels of the surrounding states, and that the oil and trucking companies would reap a windfall. In short, the governor’s plan would greatly increase the sales tax to Virginians and the outlay by Virginians for gasoline would be likely to remain the same. The governor's proposal should not be adopted by the General Assembly.
Where should Virginia be headed with transportation funding and program?
Virginia must maintain the existing transportation system and add capacity. The most important element is not just to have MORE money for transportation, but WHAT that money is to be USED FOR. Clearly we need to take care of the transportation infrastructure we already have in Virginia. No one benefits by letting roads, bridges, transit systems, or Amtrak service previously built and paid for fall apart. So maintaining what we have is critical.
Construction of new transportation capacity comes next. We are long past the time when every problem of congestion and growth can be solved with more lanes of highway. Thus, it is paramount that when new capacity is needed, all possible means of supplying that capacity be examined, in terms of both economic and environmental cost. That includes not only highways, but much more consideration of transit systems and freight rail as the means of decreasing the burden on highways. This approach maximizes taxpayers’ return on investment in new transportation facilities. It follows, then, that good transportation policy should favor flexible funding rather than earmarks limited to only one mode such as roads. Much more consideration should be given to means of improving and modernizing freight rail through private-public partnerships, in order to decrease the overall burden on the general public as taxpayers.
As the current Virginia General Assembly session evolves and various transportation funding bills are introduced and debated, RAIL Solution will comment on their respective features in an attempt to provide guidance for our members and their elected representatives.