VA May Increase Gas Tax To Fund Road Improvements: Report

VIRGINIA — Virginia's transportation secretary said the state could raise gas taxes next year in order to fund transportation improvements across the state, according to a WTOP report. The state's road construction and other projects face financial shortfall unless gas taxes or other funding sources are utilized.

Secretary Shannon Valentine said the state's transportation system "is simply not sustainable the way we are going," the WTOP report says.

An increase in road use, alongside higher fuel efficiency in vehicles, has decreased the efficacy of the Virginia gas tax, the outlet reported. Valentine's office will make an official recommendation to Gov. Ralph Northam at some point this week.

Reports say Virginia has one of the lower gas taxes in the country, at about 20 cents per gallon.

What the amount of increase could be has not yet been discussed publicly.

Patch received this statement from the Virginia Department of Transportation:

This year, Secretary Valentine was asked by the General Assembly to study the sustainability of transportation funding given the increase in fuel efficiency, the rise of electric vehicles, and the fact that, in 2018, for the first time, Vehicle Miles Traveled went up while revenue from the motor fuels tax went down.

Earlier this year, Secretary Valentine convened a Virginia Funding Sustainability Workgroup to examine the issue and analyze potential solutions. Stakeholders met in person and communicated electronically between meetings, providing input into potential immediate and longer-term remedies. The Workgroup examined how other states are addressing the transportation funding crisis and compiled a comprehensive list of options for consideration. The final meeting of this Workgroup will be held this month to review findings and recommendations.

Earlier this fall, several mid-Atlantic and northeastern states, including Virginia and the District of Columbia, said they are mulling a cap-and-trade plan that could see drivers paying more at the pump. The states and DC would direct the revenues from the plan toward mass transit projects designed to reduce carbon emissions, which may include mass transit, electric-vehicle charging and other transportation infrastructure.

The plan calls for gasoline and diesel wholesalers to pay the states for emissions allowances. Critics fear the wholesalers will simply pass the new costs directly through to consumers, and are calling it nothing more than a gasoline tax, according to Politico.

The other states invested in the plan, called the "Transportation and Climate Initiative," are Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Maine and New Hampshire.

According to the Institute on Taxation and Economic Policy, Virginians pay 21.95 cents per gallon of gasoline, while DC drivers pay 23.50 cents a gallon. That included all state and local taxes and fees as of Oct. 1.

Gasoline taxes have been a robust and reliable source of revenue for states, but the country's speedy shift into greener transportation is giving them pause. Many state legislatures are growing leery regarding the long-term viability of taxing fuel receipts as the electric car market continues to flex.