Gov. McDonnell's road plan: end gas tax, hike sales tax - NBC12 - Richmond, VA News

Gov. McDonnell's road plan: end gas tax, hike sales tax

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RICHMOND, VA (WWBT) -

Governor Bob McDonnell laid out a bold plan to help pay for Virginia roadways, including the elimination of the gas tax and an increase in the state sales tax.

Under the "Virginia's Road to the Future" plan, the Commonwealth would do away with its 17.5 cent gas tax, which has been one of the lowest in the country. Virginia would be the first and only state without a gas tax, if approved.

Additionally, the governor wants to increase the sales tax by 0.8 percent and increase the amount of sales tax revenue dedicated to transportation from 0.5 percent to 0.75 percent.

The plan also calls for new fees. Car owners would have to pay an additional $15 in annual vehicle registration fees. Drivers of alternative fuel vehicles would see an additional $100 fee, which would be dedicated to transit improvements.

The governor estimates the proposal would generate $884 million in new funding annually, or more than $3.1 billion in transportation funding over the next 5 years. In total, $1.8 billion would be allocated to highway construction over the 5-year period.

"We simply cannot continue to do what we have always done and expect this problem to go away," said Gov. McDonnell in a statement to the press. "The gas tax is a stagnant revenue source, and no changes to it will provide a reliable growth mechanism for transportation in the state."

The plan was unveiled by Gov. McDonnell Tuesday afternoon, about an hour after lawmakers were briefed on the plan.

The Commonwealth must transfer $364 million from its construction account to pay for road maintenance this fiscal year due to funding shortfalls, according to a statement from the governor's office.

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