News

Charlottesville Regional Chamber Announces Support For An Increase In The Virginia Motor Ruels Excise Tax, Secure Transportation Trust Fund, Tax Indexing, Alternative Vehicle Mechanisms, Consumer Costs Reporting

 (Charlottesville, Virginia � December 20)  The Charlottesville Regional Chamber of Commerce today sent a Legislative Memorandum to the Greater Charlottesville region�s delegation to the Virginia General Assembly, and legislative leaders, in support of an increase in the Virginia Motor Fuels Excise Tax, strengthening the Transportation Trust Fund, a call for an �indexing� of the tax, alternative vehicle mechanisms and consumer reporting of the taxation costs to motor fuels.  The Memorandum states:

 

�Our Charlottesville Regional Chamber of Commerce supports:

 

         An increase in the Virginia Motor Fuels Excise Tax;

         Indexing of the Virginia Motor Fuels Excise Tax;

         Strengthening of the statutory restrictions for the Virginia Transportation Trust Fund for transportation projects � primarily roads and bridges;

         Required consumer cost reporting of product costs and state and federal taxes levied;

         Exploration of future alternative taxing mechanisms to account for alternative fuel vehicle use of roadways; and,

         A corresponding increase in transportation maintenance and construction activity and thus employment.

 

�Our Chamber has long supported increased funding in regular recurring revenues by the Commonwealth of Virginia for the Commonwealth�s fundamental responsibility towards the growing and underfunded transportation needs.   The most logical resource, if imperfect candidate, for a methodical increase is the Virginia Motor Fuels Excise Tax.�

Chamber Legislative Memorandum 12-2:

TO        :           LEGISLATIVE DELEGATION – GREATER CHARLOTTESVILLE (12-2)

SENATE: Creigh Deeds (D-25); Emmett W. Hanger, Jr. (R-24); Bryce E. Reeves (R-17); Frank M. Ruff, Jr.  (R-15) 

HOUSE: Richard P. Bell (R-20); Rob B. Bell, III (R-58); C. Matthew Fariss (R-59); R. Steven Landes (R-25); Edward T. Scott (R-30); David Toscano (D-57) 

FROM   :           Timothy Hulbert, IOM, Chamber President 

RE        :           CHAMBER SUPPORT FOR AN INCREASE IN THE VIRGINIA MOTOR FUELS

EXCISE TAX, SECURE TRANSPORTATION TRUST FUND, TAX INDEXING, ALTERNATIVE VEHICLE MECHANISMS, CONSUMER COSTS REPORTING

*                    *                    *

Our Charlottesville Regional Chamber of Commerce supports:

 

         An increase in the Virginia Motor Fuels Excise Tax;

         Indexing of the Virginia Motor Fuels Excise Tax;

         Strengthening of the statutory restrictions for the Virginia Transportation Trust Fund for transportation projects � primarily roads and bridges;

         Required consumer cost reporting of product costs and state and federal taxes levied;

         Exploration of future alternative taxing mechanisms to account for alternative fuel vehicle use of roadways; and,

         A corresponding increase in transportation maintenance and construction activity and thus employment.

 

Our Chamber has long supported increased funding in regular recurring revenues by the Commonwealth of Virginia for the Commonwealth�s fundamental responsibility towards the growing and underfunded transportation needs.   The most logical resource, if imperfect candidate, for a methodical increase is the Virginia Motor Fuels Excise Tax. 

 

Currently, the Commonwealth of Virginia collects a tax 17.5 cents/ gallon on motor vehicle fuel sales; last set in 1986. (The highest state taxation rate is 49 cents/ gallon in New York; mostly a �sales tax� and the lowest is Alaska at 8 cents/gallon. Maryland�s rate is 23.5 cents/gallon; North Carolina�s rate is 38.9 cents/gallon.  Virginia�s rate is ranked the 10th lowest of the states.  The federal excise tax on gasoline is 18.4 cents/gallon; 24.4 cents/ gallon on diesel.)

 

For more than a decade our Chamber has lead state-wide efforts; albeit mostly unsuccessful, to increase recurring funding for transportation.  Our Code of Chamber Public Policies states:

 

�Solving the Commonwealth�s transportation problems, that continue to diminish the quality of life of our citizens and impede our economic vitality, requires more state funding.�

 

At a recent meeting of our Chamber Cabinet (past Chamber Chairs and Presidents), one past Chairman inquired as to what the 1986 Virginia excise tax rate would be currently if it had been �indexed� to inflation.  Our quick research revealed that the $0.17 / gallon rate in 1986 (which yields about $700 million/year or more for Virginia�s Transportation Trust Fund) would equal a $0.36 / gallon rate in 2012:  111% inflation (yielding about $1.6 billion/year or more for the Trust Fund).

 

Transportation analysts estimate the average motorist�s vehicle consumes about 700 gallons of gasoline annually.  700 gallons/year x $0.17/gallon = $119 Virginia Motor Fuels Excise Taxes paid.  700 gallons/year x $0.36/gallon = $252 Virginia Motor Fuels Excise Taxes paid � what we would be paying if the Virginia rate had kept pace with inflation alone. 

 

Of course there are more people and businesses driving more vehicles on roads travelling more miles each year � causing more wear and requiring increased travel capacity and mobility.

 

Our Chamber fully understands that almost all of the products we use in our daily personal and professional lives come to us over the highways.  Motor Fuels Excise Taxes are incorporated into all such prices and unfortunately any tax increase will inflate almost all prices, causing some transportation firms and transportation-related employment to contract.  Some measure of this economic contraction however, would be offset by increased construction and attendant enterprise.

 

A phased-in increase offers a conservation approach to addressing this long ignored funding need.  For example, an annual 2 cent/gallon increase would generate about $90 million in year one, growing to about $450 million in the fifth year.  Such a measured, incremental increase would limit any economic disruptions and would have minimal individual impact (700 gallons/year x $0.02/gallon increase = $14 annual increased Virginia Motor Fuels Excise Taxes paid).

 

Regarding the Trust Fund our Code of Chamber Public Policies states:

 

�Our Chamber also believes that sound governmental financial stewardship demands improvement in the financial management of the transportation system. Approaches to be considered should include statutory protection of transportation trust funds dedicated solely to the public purpose and not available for other fiscal exigencies.�

 

Our Chamber firmly holds that revenues raised by transportation taxes be secure in Virginia�s Transportation Trust Fund.

 

Our Chamber of Commerce applauds Governor Robert McDonnell and those several General Assembly members for their identification of the need to advance recurring revenues proposals to address the growing gap between our Commonwealth�s transportation needs and funding.  We encourage further bold efforts to adequately advance resolution of this fundamental Commonwealth responsibility to address these critical needs.

 

Thank you for your thoughtful and favorable consideration.

Our Mission

The Charlottesville Regional Chamber of Commerce is dedicated to representing private enterprise, promoting business, and enhancing the quality of life in our Greater Charlottesville communities.