The Virginia legislature seems poised to adopt a (at best) mediocre transportation bill — better than what Governor McDonnell proposed originally but still pretty bad — but the voting is going to be close as Tea Party Republicans are prepared to vote NO on the Governor’s top priority because it includes tax revenues to pay for common goods.
This legislation represents one of the rare occasions where House of Delegates Democratic Party members might actually have serious leverage.
When looking at this bill, here are three major problems that House Democrats can use their leverage to address:
- Wholesale gas tax is lower than general sales tax rate.
- Hybrid tax is punitive and the (il)logic doesn’t stand up to scrutiny.
- There are multiple horrid transportation boondoggles embedded in this that will syphon off $billions (potentially $10s of billions) of limited resources that could be better spent on other transportation projects to improve Virginians’ lives, improve Virginia’s economy, and better serve Virginia’s future.
Addressing these very quickly,
Make Wholesale Gas Tax Equal to Sales Tax: While there a myriad of policy reasons why lowering gas taxes are simply bad policy (moving away from user fees, rewarding pollution, hurting efforts to reduce oil imports, promoting things that move money out of Virginia (since VA imports all of its oil products), etc …), there is a fundamentally bizarre element at play here: Why is the legislature going to reduce partially the gas tax percentage while increasing the general sales tax? A simple question, “Why should fuel for cars be taxed less than clothing for children?”
Democrats in the House should demand that the wholesale gas tax equal the retail general sales tax rate. [NOTE — general sales tax is not on the wholesale price of a product, but retail, so even this would advantage gasoline products …]
Eliminate Hybrid Surcharge: Again while it is stupid on policy reasons (attacking those seeking modern technology and energy efficiency with lower pollution with lower external costs (such as reduced health implications)), the logic behind the hybrid surcharge doesn’t stand up. Governor McDonnell has claimed it is required due to lost gas taxes. However, with the new wholesale gas tax, it would take over 20 years of average driving in a hybrid to lead to lost tax revenue of $100. And, hybrid vehicles sell for higher prices than non-hybrids — thus there is more tax revenue on sales and title transfers. This is a punitive ‘anti-green’ tax which is simply a punching of those ‘greenies’ who buy hybrids and who generally favor Democratic Party candidates.
Democrats in the House should say no to this idiot policy which is targeting your own supporters.
Mandate open review of major transportation projects with legislative review before proceeding. While the Coalfields Expressway is truly the worst (designed more to support Mountain Top Removal using tax dollars than to help better Virginia transportation), there are multiple $multi-billion questionable projects that will — $ for $ — do far less than Virginia and Virginians than a wide range of other transportation project options.
House of Delegates Democrats should demand provisions for external review of major projects and legislative approval requirements to reduce the waste of taxpayer resources on ‘Roads to Nowhere’.