A meritorious gas tax index to pay for roads

At least one member of the General Assembly agrees that the state needs to increase its gasoline tax to keep the highway trust fund from going broke. But that doesn’t mean he has been able to sell the idea to tax-averse Republicans who dominate the House of Delegates.

State Sen. Emmett Hanger, R-Augusta, offered legislation that would have linked the gas tax, which is 17.5 cents per gallon, to federal Corporate Average Fuel Economy (CAFÉ) standards for fuel efficiency in cars.

His proposal makes good sense. The Virginia Senate thought so, approving it by a 31-9 vote. But a subcommittee of the House Finance Committee disagreed and killed the measure on an unrecorded voice vote. As the Free-Lance Star in Fredericksburg reported, several members of the subcommittee did say they believe it’s a good idea and that it could be reconsidered at a special transportation session later this year.

Hanger’s bill 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. Each year, then, assuming that fuel efficiency standards continue to go up, the effective tax paid on each gallon of gas would also go up.

One analysis of the bill says the motor fuels tax would essentially increase by 4 cents per gallon by 2020 under the proposal. That would hardly hamstring Virginia motorists, who have become accustomed to seeing 4-cent swings in gasoline prices almost weekly.

As of two years ago, a

1-cent increase in the gasoline tax would generate about $52 million annually for the highway trust fund.

Hanger pointed out a solid reason for the potential increase in the gasoline tax, which has not been increased since 1986. He said that as cars become more fuel efficient, the state receives less money for its transportation fund because the gas tax is a flat per-gallon fee. Cars are using less gasoline, hence revenues from the gas tax are dropping.

“What’s telling to me,” he told the subcommittee, “if you look out a few years based on the trend in fuel efficiency, ... we will have lost an additional $200 million a year in our trust fund.” Given that more fuel-efficient cars are using less gasoline, he is right.

At the same time, however, transportation needs continue to grow, requiring more and more money that the state has not been willing to invest for much of the past decade. The state has more than 58,000 miles of roadways to maintain.

One Republican on the subcommittee even agreed with Hanger that the state needs additional revenues to build and maintain roads. Del. Tim Hugo, R-Fairfax, said he liked the concept and hopes it could be revived later in the year.

“I think you may well be onto something here,” he told Hanger. “There is a concern with a diminishing return on the gas tax,” Hugo said, adding, “We have to have some sort of revenue to build the roads.”

That’s a concept Republicans have had a difficult time embracing in recent years.

Hugo said if there is a special session on transportation, he hopes Hanger will bring the bill back. Gov. Bob McDonnell said in January that he might consider a special session rather than deal with transportation during the regular session.

Del. Lee Ware, R-Powhatan, agreed with Hanger’s approach toward raising new revenues for transportation. “We’re moving in a new time. We’re watching the roads disintegrate. This is potentially a very fruitful way to go.”

Hanger was obviously disappointed he couldn’t sell the concept to the subcommittee.

But he said he thinks it will gain support as people realize the state needs money. “People are going to have to understand clearly that we don’t have enough money in the coffers” to maintain roads, he said.

In selling that idea, the first place Hanger needs to work is within his own party.