Governor proposes replacing gas tax

RICHMOND, Va. (WAVY/AP) - Gov. Bob McDonnell  unveiled his long-promised transportation funding reform package in Richmond Tuesday afternoon, less than a day before state lawmakers convene for their 2013 session.

The governor, entering the fourth and final year of the single, nonrenewable term Virginia uniquely allows its governors, has kept details of the program closely limited to a handful of top aides and advisers.

The only financial portion of the program he has discussed publicly would shift about $48 million from the General Fund by designating a sliver of the state sales tax for transportation use.

Tuesday, he announced the plan would provide more than $3.1 billion in transportation funding for the Commonwealth over the next five year.

One of the fundamental changes in his plan involves tying transportation funding to economic growth and replacing the state’s outdated gas tax revenue model with a 0.8 percent increase in the state’s sales tax dedicated to transportation. While the governor’s plan will eliminate the Virginia gasoline tax, the federal gas tax of 18.4 cents will remain.

If his plan is enacted, Virginia would become the only state in the nation without a tax on gasoline. This would likely mean a significant price reduction at the pump. The motor fuels tax on diesel would remain unchanged.

His plan also proposes increasing the vehicle registration fees by $15 and would dedicate that revenue to intercity passenger rail and transit.

Click here for a full breakdown of Governor McDonnell's 2013 Transportation Funding and Reform Package.

Hampton Roads Chamber of Commerce CCE and president, Jack Hornbech, released the following statement Tuesday:

“Current levels of congestion outside and within our region have placed business growth, tourism, port growth and our military facilities at risk.  The Hampton Roads Chamber of Commerce applauds Governor McDonnell’s leadership in offering legislation that from our perspective will address what has been the Chamber’s top legislative priority for many years.  The tenets of the proposed legislation appear to be aligned with our funding principles, which are:

1) broad-based, long-term, and efficient to collect,

2) sourced from all ultimate consumers including those in-state, out-of-state, wholesalers, retailers, and users of products and services moved over the transportation grid, 3) designed to encourage smart transportation grid use and development,

4) enable everyone to pay their fair share.

We look forward to working with Governor McDonnell and members of both parties in the House and Senate as this legislation is considered during the 2013 session of the Virginia General Assembly.  This is an important first step to fund the long-term transportation needs of Hampton Roads.”