Higher gas tax proposed to pay for road construction - NBC12 - WWBT - Richmond, VA News On Your Side

Higher gas tax proposed to pay for road construction


A new option is on the table to help pay for road construction in the commonwealth.

State Senator John Watkins is proposing a higher gas tax to raise millions of dollars. The plan is being praised by some and questioned by others.

Some are worried the proposal will lead to higher prices at the pump.

The goal is to create a solid revenue stream to address the state's growing transportation funding crisis.

Governor Bob McDonnell has called for additional toll booths on I-64 between Richmond and Hampton, as well as on I-95 near the North Carolina border, to help bridge the financial gap.

Friday morning, Senator Watkins took center stage at a meeting filled with city leaders from across the state to offer an alternative.

"It's a proposal that provides a user fee concept - an add on of five percent with regard to the price of fuel and that is off-set with a lowering income tax rate," said Watkins.

Reports indicate, by 2017 the state will run out of transportation construction funds.

Right now, about $500 million is taken from the fund annually to supplement highway maintenance needs.

Even so, Watkins' proposal has some saying, not so fast.

"I think, if the state of Virginia increases taxes by adding five percent - which is 13 cents a gallon - prices at the pump will go up 13 cents a gallon,"  said Michael O'Connor, President of Virginia Petroleum, Convenience and grocery Association.

The user fee or gas tax would raise about $734 million annually for road maintenance.

"This would make the first time Virginia state government imposed a tax twice on a product - that being gasoline," O'Connor added.

Watkins plans on presenting his proposal to the general assembly next year.

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