11.25.2014  |   | Subscribe  | Contact us

All News & Blogs

E-mail Alerts

The 'crossover effect' can no longer work
General Assembly 2013--transportation. Chap Peterson.

Date published: 1/6/2013


--Let's talk about transportation in Virginia. The McDonnell administration has shown it can spend money. It has shown zero ability, thus far, to develop sustainable state revenues so that our highways are not dependent on federal stimulus money.

The current transportation budget is $4.5 billion annually. That arises mostly from federal spending (24 percent), motor fuels tax (19 percent), titling tax on cars (13 percent), and the retail sales tax (12 percent). About 12 percent of that money is dedicated to paying off debt. The remainder must cover the highway maintenance, new road construction, and mass transit.

Here's the problem: The funding model is based on frequent fuel purchases and new vehicle sales. But the trend line is the other way. Modern-day cars are more fuel-efficient and last longer. So our state revenues have been stagnant for years.

We have bridged this problem by shifting up to $500 million annually from new construction to maintenance, so that our existing highways would be paved. We call this the "crossover effect" and it has effectively wiped out our new construction funds.

That strategy cannot last in the long term, as our need for highways and transit increases in eastern Virginia. We must have funds set aside for new projects.

This month, I will also be filing a transportation bill that will increase the existing fuels tax by a dime to 27.5 cents--still well below the national average of 31 cents per gallon. My bill will include an "indexing" so that the fuel taxes adjust automatically based on highway usage and revenues. That new money, approximately $500 million annually, will then be pledged to wipe out the "crossover effect."

You can't get something for nothing. The gas tax is fair in that it charges users of our highways, including the 30 percent of drivers who are not state residents. No other tax spreads the burden that fairly.

My idea may not be the best. Let someone come forward with a better one. In the meantime, we must move forward in Virginia with adequate money for roads and trains.

Sen. Chap Petersen, D-34th, represents Fairfax City and parts of Fairfax County in the Virginia state Senate.