This afternoon Gov. Bob McDonnell unveiled an eye-opening plan he said would solve Virginia’s transportation funding woes once and for all: He wants to abolish the 17.5 cents-per-gallon gasoline tax and replace it by raising the general sales tax from 5 percent to 5.8 percent.
Because I may be doing a column about that proposal soon, I’m interested in your thoughts about it.
McDonnell says this will raise more than $500 million each year for transportation infrastructure projects in Virginia, which have been sorely hamstrung in recent years. Of course, that’s because the legislature irresponsibly hasn’t raised the gas tax since 1987.
From the governor’s email:
“That’s right, no more gas tax at the pump. No sales tax at the pump either. When this plan passes the price of gas will go down, and Virginians will spend $3.5 billion LESS at the pump over the next five years.
“We then propose increasing the sales tax from 5% to 5.8%, still below every neighboring state and the District of Columbia, and putting that increase into transportation from here forward. The advantage of that change? We’re ensuring that transportation receives the new funding it needs in the years ahead by tying it to a mechanism that moves in tandem with economic activity and inflation. That is how every other tax works. That is what will make transportation funding sustainable again. Read more »