Virginia Senate Passes Bill to Index Gas Tax to Inflation


The Virginia Senate has just done something their Maryland counteparts have failed to do year after year, decade after decade, since 1992:  Pass legislation providing a significant long-term increase in dedicated transportation funds.  As the story below relates, they have passed a bill indexing their fixed 17.5 cent per gallon gas tax to inflation.  The payoff will be small at first, but will produce significant new revenues over time. 

Maryland, on the other hand, continues to avoid facing the hard, cold reality that their Transportation Trust Fund is now so depleated it can no longer meet even our most basic transportation needs.  With Virginia already well positioned to attract Maryland businesses across the river with lower tax and regulatory hurdles, now they have also shown more resolve in meeting future transportation needs.  The jobs picture in Maryland could get really bad, really fast, if they fail to act this session.

Maryland legislators, are you paying attention?  This is your wake-up call and you need to act now.


Virginia Senate Approves Indexing Gas Tax for Inflation

Virginia’s Senate approved a bill Tuesday that would automatically increase the state’s per-gallon gasoline tax each year at the rate of inflation.

“The state’s gasoline tax has been set at 17.5 cents per gallon since 1986,” The Free Lance-Star of Fredericksburg reported. “In recent years, repeated attempts to raise the tax, or make it a percentage sales tax, have failed in the House of Delegates.”

The indexation effort is contained in a larger transportation bill sponsored by Sen. Frank Wagner, R-Virginia Beach. Wagner’s bill proposes using the U.S. Department of Labor’s “producer price index for other nonresidential construction” to annually adjust the fuel tax that supports transportation investment in Virginia.

A fiscal impact statement estimates indexing the tax could generate an additional $7.7 million in 2013, and up to $124 million by 2018.

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