McDonnell proposes radical transportation plan, increase in sales tax
RICHMOND — Virginia’s gasoline tax would be eliminated and its retail sales tax would increase from 5 percent to 5.8 percent under a transportation funding plan Gov. Bob McDonnell unveiled Tuesday.
The governor’s proposal also would increase vehicle registration fees, impose a $100 annual fee on alternative fuel vehicles and shift revenue from the state’s general fund to provide more dollars for roads, rail and transit. McDonnell said the complete funding package could generate more than $3.1 billion in additional transportation funding over the next five years.
Administration officials said part of the revenue from a proposed $15 increase in vehicle registration fees would pay for the extension of passenger rail service to Roanoke, though it’s unclear how soon that would be available.
This doesn’t make the least bit of sense. Let’s make those who use the roads pay for the roads and keep the sales tax out of it.
McDonnell is not a strong businessman. Remember, he wanted to sell our ABC stores that made a profit of over a Billion dollars the past 5 years. He also allowed the VRS to be the ATM card for strapped localities, then said it was a mistake. Well duh!!!
To replace the gas tax revenue, the state would increase its retail sales tax by 0.8 percent and direct all of the new revenue to transportation. The tax increase would not apply to groceries, which are taxed at a rate of 2.5 percent.
The sales tax increase would generate $708.7 million in the fiscal year that begins July 1, $24.6 million more than the state’s gas tax would produce, according to administration estimates. By 2018, the additional sales tax would generate nearly $870 million, about $183 million more than the gas tax.
Under McDonnell’s plan, 85 percent of the new sales tax revenue would go to highway maintenance and the remainder to new construction.
If McDonnell thought of it, I suspect it probably isn’t in MY best interest.