NATIONS’ CAR DRIVERS AND PASSENGERS DUMP CARS, GAS TAXES FLOUNDER EVERYWHERE, AND NOW TWO STATES MOVE TOWARDS BROAD BASE TAXES FOR TRANSPORTION BUDGETS WITH ONE, VIRGINIA, ALREADY ACROSS THE FINISH LINE WITH ITS ABOLISHING IT’S 17.5 CENT GAS TAX LAST WEEK
…more shocks and tremors from the “transportation tectonic shift”
The realm of transporting people from place to place in America changes now before our very eyes.
The century’s first decade brought a drop in car travel for every age group, flattening or even decline in vehicle miles of travel in most states, and since 1995 a 20 percent drop in the proportion of the under-30 driver licensing with their car travel down even more 22 percent.
States and the federal government this century continue experience an even greater drop in motor fuel and car-related taxes from more fuel-efficient vehicles and driving cutbacks by consumers. Now in 2013 comes a revolution in state finance of all transportation led by Virginia and Massachusetts January proposals looking to fund needed transportation programs and projects with broad base taxes, quitting the practice of about a century of funding highways and most other transportation needs from motor-vehicle related taxes and fees.
Less than two months after Virginia Governor Bob McDonell proposed it, the financing plan passed by large margins in the House and Senate last week. The new law abolishes the 17.5 cent Virginia gasoline tax and moves to a sales tax on motor fuels along with a dedicated transportation 0.8% sales tax on top of the current 5% for all goods and services except food. The new approach raises over $3 billion in the first five years versus under the old regime.
Meanwhile in Massachusetts, the plan put forth by Gov. Deval Patrick raises $1.9 million in new revenue yearly, mostly from the income tax, with both all transportation modes and education getting needed funding—particularly the MBTA, a backlog of highway and bridge projects, and expansion of passenger rail service statewide.
Governor Patrick’s plan includes some tax reform, such as reduction in the sales tax by a penny, sets gasoline and motor vehicle taxes and fees into an automatic increase schedule in line with changes of inflation.
With Virginia and Massachusetts in the lead—one with a Republican governor and legislature and the other Democratic—can the rest of the nation be far behind?