Posted January 10, 2013 | comments Leave a comment

Editorial: Let the gas tax debate begin

The price of gas shot up a few more cents this week, to the despair of area motorists who don't have hybrid or electric vehicles. The cycle is never-ending, with prices going up and down like horses going around on a carousel.

Have you taken a drive to neighboring West Virginia this year? West Virginians, as of Jan. 1, are paying more - 33.4 cents per gallon - at the pump as a result of a 1.2 cent increase in that state's gas tax.

Virginians are paying 17.5 cents per gallon of gas in state taxes, but that could change if Gov. Bob McDonnell's proposal to kill the tax altogether and raise the state's sales tax from 5 percent (4 percent state tax plus 1 percent local tax) to 5.8 percent is approved by lawmakers.

States collect sales tax on gas and diesel fuel to fund transportation budgets, but the governor says Virginia's gas tax is not bringing in enough revenue to build and maintain roadways. He blames the tax collection decline on inflation and more fuel-efficient vehicles. (He is not including the 17.5 percent diesel tax in the plan - that would remain, since heavy trucks do the most damage to the state's roadways.)

The plan is an interesting one, is sure to be a hot topic of debate, and one that other states struggling to fix their potholes and build new roads will be watching with interest. If lawmakers approve McDonnell's proposal, Virginia will be the only state in the nation to not collect tax on gasoline sales.

With the proposed sales tax increase to 5.8 percent, Virginia still would be lower than many other states with much higher combined state and local taxes. The Tax Foundation, a nonpartisan tax research group based in Washington, D.C., notes that in 2012, Virginia was among states with the lowest average combined state and local sales tax rates. The other states are Hawaii, 4.35 percent; Maine, 5 percent; Wyoming, 5.34 percent; and Wisconsin, 5.43 percent. States with the highest combined rates include Tennessee, 9.45 percent; Arizona, 9.12 percent; Louisiana, 8.85 percent; Washington, 8.80 percent, and Oklahoma, 8.66 percent.

What do you think about the governor's plan? Would you kill the gas tax and raise the sales tax? Or would you raise both? If you could craft the state's budget, how would you raise funds to build and maintain roadways?

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