Virginia lawmakers advance plans to boost transportation revenue

February 13, 2020

Keith Goble


Progress is being made at the Virginia statehouse to change how the state collects transportation revenue and how much is being raised.

Senate lawmakers this week voted 23-17 in favor of an amended version of Gov. Ralph Northam’s proposed two-year budget. The Democratic governor’s plan includes an overhaul for transportation revenue collection.

“We rely on motor fuels taxes for many of our transportation dollars,” Northam said during his recent budget address. “But modern vehicles use less fuel, which means that revenue isn’t keeping pace with the continuing need.”

His solution is to restructure the state’s funding model, including collecting more tax on fuel.

Fuel tax increases

Virginia collects a 22.4-cent tax on gas and a 23.7-cent rate on diesel.

The governor proposed raising fuel rates by 12 cents. The increases would be phased-in over three years in 4-cent increments.

Sen. Richard Saslaw, D-Fairfax, introduced the governor’s plan in the chamber. The Senate-approved version, SB890, includes a plan to raise fuel rates by 8 cents over two years.

As proposed by the governor, the tax rates would also be tied to inflation allowing for regular increases.

Some cost savings considered

The Northam administration’s restructuring proposal also would save Virginians about $280 million per year.

Vehicle registrations would be reduced by half. The change is estimated to save residents more than $130 million each year.

His transportation revenue plan also calls for eliminating vehicle safety inspections, saving Virginians about $150 million annually.

In exchange for reducing the amount of fuel tax rate increases, SB890 would keep vehicle registrations at the current rates and maintain safety inspections.

Additionally, the governor’s plan and SB890 include the implementation of a new fee on alternative fuel and fuel-efficient vehicles. A highway use fee and a mileage-based user fee program also are included.

Northam said he supports Virginians making “environmentally friendly vehicle choices.” He adds that those drivers continue to use the state’s system of roads, while the system sees “fewer and fewer dollars.”

Also included is permission for the use of speed radar along certain stretches of roadway. Automated tickets would be generated for vehicles exceeding the posted speed limit by more than 10 mph.

House approves similar transportation revenue plan

House lawmakers this week voted 56-42 to approve a version – HB1414 – that more closely resembles the plan originally outlined by the governor.

The bills await further consideration in the opposite chamber. It is expected that a conference committee between the chambers will need to meet to hammer out an agreement on the two versions to advance the transportation revenue plan to Northam’s desk.

More Land Line coverage of news from Virginia is available.