Virginia leaders move forward plans to boost transportation revenue

January 14, 2020

Keith Goble


Legislative leaders in Virginia are pursuing changes to how the state collects transportation revenue and how much revenue is raised.

Gov. Ralph Northam recently unveiled his 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.

“It’s no secret that the current way we fund transportation is simply not sustainable,” he said during his recent State of the State Address. “… We need to reform transportation funding this session.”

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

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

Once fully implemented, the rate increases would add nearly $500 million in additional revenue for state projects.

The tax rates would also be tied to inflation allowing for regular increases.

Some cost savings included

The Northam administration’s restructuring proposal would also 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 plan also calls for eliminating vehicle safety inspections. It is estimated the change would save Virginians about $150 million annually.

The governor said data shows there is no connection between highway safety and vehicle safety inspections.

“This funding proposal is more sustainable, and it is more equitable. Those who drive more should pay more,” Northam said.

He added that the changes will help the state boost spending on rail, transit, roads and interstates.

Legislative action

Leading Democrats at the statehouse have introduced legislation that focuses on achieving plans outlined by the governor.

House Speaker Eileen Filler-Corn of Fairfax and Senate minority leader Richard Saslaw of Fairfax have bills that include raising fuel tax rates and lowering vehicle registration fees.

Additionally, their legislation includes the implementation of a new fee on alternative fuel and fuel-efficient vehicles.

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.”

Transportation bonds would also be authorized for improvements in the Interstate 81 and Interstate 66 corridors.

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.

The bills, HB1414 and SB890, are in committees in their respective chambers.

More Land Line coverage of news from Virginia is available.


Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.