by James A. Bacon
In the spirit of Don Rippert’s “Clownie” awards, I bequeath the Three Stooges Knucklehead award to the authors of the $100 levy on alternative-energy vehicles, a category that encompasses hybrids. I’m not sure who came up with the idea, but Gov. Bob McDonnell pushed it, and majorities in the House and Senate voted in favor of it, so they own it.
The idea was bird-brained from the beginning. The logic — or perhaps I should say, “the thought process,” for there was no logic to it — behind the tax was that alternative-fuel vehicles don’t pay gas taxes, or they pay lower gas taxes, or something, so, therefore, they don’t pay their fair share of maintaining and building Virginia’s road network.
Let me state for the record that I find it admirable that the wonks inside the McDonnell administration embraced the idea that the transportation system should be based upon a “user pays” system in which the users and beneficiaries of Virginia’s road network pay their proportional share of what it costs to operate it. Owners of alternate fuels vehicles should pay their fair share. Unfortunately, the authors of the legislation decided to apply that logic only to owners of alternative vehicles.
Woob! woob! woob! woob! Under his original plan, McDonnell proposed to eliminate the gas tax entirely, shifting the lion’s share of the transportation tax burden to those who paid sales taxes, which includes just about everybody, including people who don’t even own cars! If everyone was to pay the sales tax and no one was to pay the gasoline tax, in what way could it be said that the owners of non-gasoline vehicles were not paying their fair share?
Under the compromise plan, the state will collect a wholesale gas tax. But the muddled thinkers behind the legislation apparently forgot several things. First, hybrids, electric vehicles and gas-powered vehicles do pay taxes — a sales tax on automobile sales, the automobile registration fee, the sales tax, and tolls on Virginia’s increasingly ubiquitous toll roads. Second, hybrids do consume gasoline, although they may consume less of it than comparably sized vehicles. My wife’s hybrid Toyota Highlander gets 30 miles per gallon on a good day. There are plenty of non-hybrid cars that get better gas mileage — and they don’t have to pay the levy. Does it really make sense to tax hybrids twice?
I’m a victim of coicumstance! Del. Scott Surovell, D-Fairfax, and Sen. Adam P. Ebbin, D-Alexandria, are miffed at the alternate-fuels tax, and they have started an online petition at www.nohybridtax.com to ask McDonnell to delete it with his line-item veto. Unfortunately, they base their case on the notion that the tax punishes people for making the “right” choice — driving environmentally friendly cars. If they were consistent, they also would oppose taxing retail sales instead of gasoline sales, which is just as wrong-headed from an environmental point of view. But they don’t. In the Times-Dispatch, they tried to convert the controversy into a regional grievance. The tax is unfair to Northern Virginia because NoVa has the highest concentration of hybrid vehicles in the state.
In sum, the debate over transportation is intellectually incoherent on both sides of the philosophical divide. That’s what you get when everybody stakes a position based upon their own narrow self interest and floats transparently fraudulent arguments about why their special interest should be privileged above all the others.
Oh, a wise guy, eh? The only principle that makes sense for road funding is that users and beneficiaries should pay. At present, the retail gas tax remains the best proxy for a user-pays tax. All other road taxes (except tolls, another user fee) should be scrapped, and the full burden of maintaining roads, bridges and highways should be heaped upon the gas tax. If the tax goes up, it goes up. It’s a friggin’ user fee! When the price of gasoline goes up, people beef about it, and then they get over it. When the price of auto insurance goes up, people beef about it, and they they get over it. When the price of car washes go up… you get the idea. The gasoline tax is a minor item in the total cost of automobile ownership. When the price goes up, they’ll get over it.
Meanwhile, anticipating the day when a large number of people drive cars that don’t consume any gasoline at all, we should be laying the groundwork for a Vehicle Miles Traveled (VMT) tax.
Nyuk! nyuk! nyuk! The burden of building new roads, highways and bridges should be borne by those who benefit from them, either as users or as landowners whose property values rise as a result. Virginia can raise money for new construction through (a) development impact fees, (b) special tax districts on commercial property owners and (c) tolls. If those sources of revenue are insufficient, then the economic justification for building the road probably is non-existent.
Of course, a pure user-pays scheme would take most of the politics out of road financing, and where would that leave the clowns in the General Assembly? The Three Stooges will give up slapstick before Virginia’s politi-clowns relinquish their power.
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