Fuel Taxes on the Rise

Fuel Taxes on the RiseWith tolls on the rise in Virginia, one would expect the state had found a lucrative way to meet the state’s transportation budget needs, but now state democrats have proposed a new fuel and sales tax they say would help meet the budget demands.

According to the Daily Press, Senate Minority Leader Richard Saslaw of Fairfax proposed a bill that would increase the state’s fuel tax 10 cents over the next two years, then it would increase based on the rate of inflation.  The legislation would also increase the state’s sales tax from 5 percent to 6 percent, with half of the increase going to transportation and the other half going to education.

“We cannot take money from the general fund – any money – unless we raise the revenue,” Saslaw said.

Saslaw’s legislation is in direct contrast to current Gov. Bob McDonnell’s plan that would eliminate the fuel tax but would raise the state’s sales tax to 5.8%.

The Daily Press reported that Saslaw’s proposed legislation would generate  $500 million a year and would prevent transportation funds from being diverted.

Saslaw added that  North Carolina’s fuel tax is currently 21 cents higher than Virginia’s.

“Even if Democrats can get their transportation plan passed in the Senate, they will have a tough time getting it through the Republican-dominated House of Delegates. House Speaker William Howell, R-Stafford, is carrying McDonnell’s transportation initiative in the chamber, where his party has resisted attempts to raise or index the gas tax for years,”  the Daily Press reported.

Read more about the proposed legislation here.