RICHMOND
--A House subcommittee has killed a bill to index the gas tax, but delegates said they believe it's a good idea and they hope for a special transportation session this year to work on it.Sen. Emmett Hanger's bill would have linked the gas tax, which is 17.5 cents per gallon, to federal CAFÉ (Corporate Average Fuel Economy) standards for fuel efficiency in cars.
Hanger's proposal would take the percentage increase in the CAFÉ rate each year and multiply that by the 17.5 cents-per-gallon gas tax in Virginia. So each year, assuming that fuel efficiency standards continue to go up, the effective tax paid on each gallon of gas would go up.
One analysis of the bill says the motor fuels tax would essentially increase by 4 cents per gallon by 2020 under Hanger's bill.
The reason for it, Hanger said, is that as cars get more fuel-efficient, the state receives less money in its transportation fund because Virginia's gas tax is a flat per-gallon fee. Hanger calls it "preserving our base."
"What's telling to me is if you look out a few years based on the trend in fuel efficiency, if you go out four or five years we will have lost an additional $200 million a year in our trust fund," he told a subcommittee of the House Finance committee.
The subcommittee decided to carry over Hanger's bill, which essentially kills it for this session. But delegates, including Republicans who have opposed raising taxes for transportation, said they like the concept and hope to revive it later in the year. "I think there is some concern on the timing, but I think you may well be onto something here. There is a concern with a diminishing return on the gas tax," said Del. Tim Hugo, R-Fairfax. "We have to have some sort of revenue to build the roads."
Hugo said there may be a special transportation session--Gov. Bob McDonnell had said early in the session that he might consider a special session, rather than deal with one of his marquee campaign issues, transportation, during the regular session. Hugo said if there is such a session, he hopes Hanger brings back his bill.
Del. Lee Ware, R-Powhatan, agreed. "We're moving in a new time. We're watching roads disintegrate. This is potentially a very fruitful way to go."
Hanger said he hasn't heard any signals recently pointing toward a special session, but would like to see a bipartisan commission form some recommendations before any session.
"Some of us need to begin pushing that," he said.
Several lobbying groups testified in support of Hanger's bill, calling it by a term that this session almost guarantees a bill's friendly reception: a "jobs bill."
Phil Abraham, representing the Old Dominion Highway Contractors Association, gave delegates a chart showing a "dramatic drop" in asphalt production and aggregate production. "That's roads that are not being repaved, potholes that are not being filled and jobs that are being lost," Abraham said. "We view this bill as one small measure to try to stop the bleeding that's occurring, to try to keep our road system treading water while we address the larger problem" of how to generate another $1 billion a year for roads.
Michael O'Connor, of the Virginia Petroleum, Convenience and Grocery Association, opposed the bill, saying the annual change in tax would be a burden on retailers, and that indexing the tax makes it less transparent.
After the meeting, Hanger said he thinks his proposal will get more support as people realize the state needs the money. "People are going to have to understand clearly that we don't have enough money in the coffers" to maintain roads, he said. "I heard a lot of receptivity to it I'm encouraged."
Chelyen Davis: 540/368-5028
Email: cdavis@freelancestar.com