As both chambers of the Virginia General Assembly prepare to work to find common ground after passing different versions of Governor Bob McDonnell’s major transportation funding plan, critics say the governor’s proposal to eliminate the state gas tax and replace it with a higher sales tax would not provide enough revenue to satisfy the state’s transportation needs.
On Monday the House gave preliminary approval to a measure that keeps most of McDonnell’s proposals intact, including eliminating the state’s 17.5 cents-per-gallon gasoline tax. In the Senate, a key Republican lawmaker is proposing a different solution: a 5.5 percent sales tax on the wholesale price of gasoline tied to inflation.
The bill approved by the House killed the governor’s plan to impose a $100 registration fee on alternative fuel vehicles. The proposals are scheduled for a final vote today.
The McDonnell administration argues higher fuel efficiencies continue to eat into gas tax revenues so the tax should be replaced, especially as the adoption of hybrid and electric cars is expected to reduce gas consumption.
The latest hybrid and electric models are currently on display at the Washington Auto Show, where proponents say they have become much more practical for everyday use since the first generation models.
Mahi Reddy, the founder of SemaConnect, a manufacturer of electric vehicle charging stations based in Bowie, Maryland, says EVs are indeed becoming more popular, although they only represent less than one percent of all vehicles on the road today.
“Previous generations of electric cars struggled because they used lead-acid batteries. They used nickel-metal hydride batteries,” Reddy said. “The new generation all use lithium batteries, the same lithium technology that is in your cell phone. So that means these batteries are much lighter, they have much more range, and these cars are much better engineered so they are practical cars you can use to commute to the office.”
In his view, the biggest obstacle facing EVs is the lack of charging stations.
A report by the Metropolitan Washington Council of Governments found our region has strong potential for EV growth, but an “underdeveloped charging network” is one of several problems.
But while the governor views improving fuel efficiency as a reason to dump the gas tax altogether, the Council of Governments executive director Chuck Bean takes the opposite position.
“In terms of transportation funding all of the options need to be on the table; gas tax, sales tax. We are really in a crisis of transportation funding and need to be very creative,” Bean said. “I would hesitate to reverse or eliminate any taxes because there is simply a great need for more funding.”
The potential of these vehicles does raise another potential challenge to funding transportation: as the U.S. vehicle fleet is comprised of more EVs and regular vehicle fuel standards improve, the gas tax will lose even more of its purchasing power. That would leave states looking for other revenue streams like higher tolls, more borrowing, higher vehicle fees, or higher sales or property taxes to pay for roads and rails.
The smart growth community says there is no way for Virginia to build its way out of its infamous traffic congestion and taht the solution lies in changing land use policies and urban planning strategies to maximize the potential for transit, walking, and bicycling.