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2/15/2013 10:30:00 AM Write a Letter to the Editor Write a letter to the Editor

Va. Lawmakers Reach Tentative Deal on Transportation Funding

Measure Would Replace Fuel Tax With Wholesale, Sales Taxes

Virginia House and Senate negotiators agreed to a compromise transportation plan Wednesday that would eliminate the per-gallon tax on diesel and gasoline, replacing both with wholesale taxes paid by fuel distributors, the Richmond (Va.) Times-Dispatch reported.

The compromise would also force Gov. Bob McDonnell (R) to seek legislative approval before imposing tolls on any existing interstate highway. He is pursuing a plan to put a single toll on Interstate 95.

Instead of a 17.5-cent-per-gallon tax on each fuel, distributors would pay a 6% tax on the diesel they sell and a 3.5% tax on gasoline, the Times-Dispatch said.

The tentative plan would also increase the 5% sales tax to 5.3%, with most of the new money going to transportation, and would boost the tax on motor vehicles to 4% from 3%.

Legislators from the House of Delegates and Senate reached the compromise after the two chambers could not agree on McDonnell’s plan that would have eliminated the gasoline tax, kept the diesel tax and raised the sales tax to 5.8% to pay for transportation.

The full General Assembly would have to reach agreement by Saturday, when it adjourns, but the compromise’s fate in each of the chambers is unclear, as Republicans are cautious about raising any taxes, and Democrats do not want to eliminate the per-gallon fuel tax, the Times-Dispatch reported. Republicans control the House, while the state’s Senate is evenly split.

By Timothy Cama
Staff Reporter

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