Is increasing the gas tax a viable solution for Virginia?

RICHMOND, VA (WTVR) — The Commonwealth of Virginia has a problem. A math problem.

Maintenance costs within the state’s Transportation Department are expected to create a deficit of $500 million dollars over the next several years.

The problem is that the state’s gas tax, which accounts for about thirty percent of the maintenance department’s budget, has been taking in less money in recent years.

As a solution, some officials propose raising the gas tax. 

State Senator John Watkins (R-Midlothian) is one official proposing a bill to increase it. 

“We do not have a revenue stream that can adequately provide and fix the roads that we have,” Watkins told CBS 6. 

Watkins would increase the gas tax by five percent. He would offset that tax hike with an income tax decrease.

Presently, the Virginia tax rate is about 38 cents per gallon of gas. It would increase about two cents. 

Virginia has not raised its gas tax since 1986.

But is this a viable solution longterm for the state?

Governor Bob McDonnell, in a press conference Monday, admitted that the long term outlook of the gas tax revenue stream is not a strong one. 

“It is a declining revenue,” McDonnell said.

The Governor’s logic is based on the fact more people are switching to hybrids and electric cars – meaning they do not head to the gas station as often.

Traditional gasoline cars are also being regulated more closely.

By 2016, new cars will have to get nearly 36 miles on gallon of gas. By 2025, that jumps up to more than 55 miles.

While the gas tax may be a solution for now, long term the state will need other forms of revenue to offset the declining taxes people are paying at gas stations.  

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