WASHINGTON – Virginia could become the first state to get rid of its tax on gasoline.
But that’s just part of a proposal from Delegate Tim Hugo, R-Fairfax.
Hugo wants to dump the state’s 17.5-cent gas tax as a revenue source for transportation projects and road maintenance and replace it with an increase in the statewide sales tax.
The sales tax would increase from 5 percent to 5.9 percent, under Hugo’s plan.
Hugo would then take some of the existing sales tax revenue and divert it to the transportation trust fund.
“Take a half a cent out of the current unallocated sales tax and put that into transportation,” Hugo says.
Hugo says his plan could bring in the $500 million a year the state needs to meet transportation costs.
The transportation money would come from surplus revenues and would not reduce funding available for other core programs, such as education and public safety, he says.
Virginia has not raised its gas tax since 1986 and better car mileage has, in part, led to a dwindling income for the state’s transportation system.
“What we are trying to do is think outside the box, and think about a long term way to stabilize the trust fund,” says Hugo.
The Virginia General Assembly session opens on Jan. 9. There are several other proposals for raising revenue for transportation, including one that would increase the gas tax by indexing it to the inflation rate.