RICHMOND, Va. (AP) — Virginia Gov. Bob McDonnell has proposed a five-year, $3.1 billion transportation funding package that includes replacing the state's gasoline tax with a sales tax increase of nearly a penny on the dollar.
The Republican governor unveiled his plan Tuesday. If state lawmakers approve, Virginia would be the first state to drop its gasoline tax.
McDonnell said the gas tax is no longer a viable revenue source for maintaining and building highways because of inflation and more fuel-efficient vehicles. State officials said the purchasing power of the gasoline tax has declined by more than half since it was last increased, to 17.5 cents per gallon in 1986.
The plan would boost the state's 5 percent sales tax to 5.8 percent and dedicate additional revenue for transportation, which would also get a larger share of existing sales tax revenue.