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VA Governor's Road-Funding Plan: Penalize Hybrids, Electric Cars

 
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2012 Toyota Prius Plug-In Hybrid

2012 Toyota Prius Plug-In Hybrid

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Nobody particularly likes taxes, but as they go, gas tax is at least generally fair in how it's applied. The more gas you use, the more you pay. Use less, or none at all, and you pay less--or nothing.

Virginia residents will soon be paying nothing even if they drive gas guzzlers, as Governor Bob McDonnell has proposed dropping the state's gasoline tax, the revenues from which he describes as becoming "stagnant".

The extra revenue must come from somewhere though, so the proposal includes an increase in sales tax of 0.8 cents on the dollar, a $15 registration fee for every new car--and a $100 annual fee for plug-in and hybrid cars (similar to that of Washington state, but penalizing hybrids too), to make up for all that gas tax nobody else will be paying.

McDonnell himself says in the Washington Post that it all hinges on the state's low gas tax, which has remained 17.5 cents per gallon since 1986.

This wasn't indexed for inflation, meaning--in 1986 dollars--it's now worth about 8 cents on the gallon--and not making the state enough money.

Rather than raise tax in line with inflation, McDonnell wants to scrap it entirely, levying fees in other areas to cover the deficit.

While he argues that an increase in sales tax ultimately benefits the transport of everyone--those who use public transport, as well as private vehicles, for example--it's hard not to see the glaring flaw: Owners of gas-guzzlers will pay a lot less to run their vehicles, while those who've deliberately chosen more efficient plug-in and hybrid cars, will instantly pay $100 per year regardless of how much gas they use.

91,000 plug-in and hybrid cars would be affected--and potentially, the sales of many others.

Incidentally, the 17.5 cents per gallon tax will remain on diesel--to maintain revenue from commercial vehicles, as well as unlucky Virginia diesel car drivers, who'll also have chosen their vehicles to reduce costs over the equivalent gasoline car...

Even for those looking forward to reduced gas prices, it's unlikely those 17.5 cents per gallon will go straight back in people's pockets.

As the Washington Examiner highlights, it's likely that oil companies, wholesalers and gas stations will bump up prices to make the most of it--a saving of 10-12 cents per gallon for consumers is more realistic.

The proposed changes could very well improve Virginia's budget, as residents from surrounding states make the journey to VA to save even more on already-cheap gas.

But for owners of electric and hybrid vehicles, it may feel like their decision to drive a cleaner car is going completely unappreciated.

You can read more on the governor's proposals on our sister site, TheCarConnection.

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Comments (18)
  1. Sounds like a scam dreamed up by big oil to try and discourage efficient vehicle sales. Because its an extremely stupid way to lower the price at the pump, what if there's a spike in the price of oil? If gas hit five dollars per gallon even without the tax added in then everyone will be paying more for everything and the slight saving won't matter. Oil doesn't have a set price so the benefits of this plan could be short lived.
     
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  2. That does it, Governor McDonnell. You're off my Christmas card list.
     
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  3. Setting aside the obvious absurdity of only charging a fee to hybrids and EVs(not ICE cars)...if the problem with the gas tax was that it is not tied to inflation, what type of idiot proposes a $100/year fee that is not tied to inflation? Won't it have the same diminishing value over time problem?
     
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  4. Well, he's either an idiot or he has a hidden agenda involving the fossil fuel industry, campaign financing and future lobbying opportunities. On further reflection, "all of the above" is an acceptable answer too.
     
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  5. If the issue is paying for roads, he should tax you based on the number of miles on your odometer.

    If the goal is to reduce gasoline consumption and make up revenue he should jack up the gas tax and/or peg it to inflation.

    If the goal is to get reelected, he should appeal to as broad a group as possible and gouge a small, unpopular group regardless of whether it makes sense or not.
     
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  6. Well, think what happens here. He makes rural virginians happy because they pay more in gas tax now, and he makes prius driving liberals angry and they don't vote for him.

    What really happens though, is he puts himself on the national stage.
     
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  7. I guess as John K. Galbraith says: "If all else fails, immortality can always be assured by spectacular error".
     
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  8. "Similar to Washington State"

    Not really we get exemption on Sales Tax - which adds upto $3K on Leaf - or 30 years worth of $100 a year fees.
     
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  9. I'm gonna go with this "Moron" is either an oil pocket guy, an old idiot who has no love of "Mother Earth" and/or could give a rats ass for what is being left behind for his children and those generations of his lineage to follow. Probably drives one of those hogs of an H2 or something and hates that people are waking up, caring about the environment and looking to the future of their planet, as well as, their pockets. This man and his kind are clueless when it comes to making a living...I mean truly working to make enough to live! Vote them all out next election!
     
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  10. If a 5000 lb vehicle is taxed the same as a 2500 lb vehicle, I'd be pretty pissed.
     
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  11. Wow this makes absolutely no sense.
    While we have all heard about the shortfalls of gas tax revenue due to tax levels not being raised, and more fuel efficient vehicles, the plan by VA is the dumbest idea I've heard to remedy it.

    I would thing the best alternative would be a per mile fee with different levels depending on the weight of the vehicle. For states that mandate inspections getting mileage records would be no issue. For states that don't there are certainly ways to make that work.
     
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  12. Why not just leave EVs unscathed and slap those $100 onto every ICE? That would be just and an incentive to go electric.
     
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  13. I understand the tendency around here for people to want govt to use policy to influence people's buying choices, such as raising gas taxes to get people to buy more fuel efficient vehicles. This gov obviously isn't interested in that. But I'll suggest something else for you to consider. State gas taxes are typically intended to raise revenue to pay for roads. Therefor, people who drive more should pay more. But since gas taxes are non-progressive, they hurt poor people the most. By this policy, the gov shifts some of that burden from the poor to the upper-middle class who can afford electrics. Does that sound so bad?

    I agree with others that a better plan would be to tax by mile and weight, but with a rate adjusted by income.
     
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  14. I am NOT supporting this plan.

    However, I think the "logic" is that gas tax is removed but sales tax is increased. So, some of that revenue will come from sales tax which applies to gasoline as well. In this case, $100 makes some sense for plugins. However, it doesn't make any sense to the Hybrids..


    BTW, is this governor Republican?
     
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  15. As a Volt driver now and a future EV driver, I agree that something needs to be done to compensate for the future fall in gasoline tax revenues. This, however, is not a rational approach for many of the reasons others here have already noted.

    Whether it be paying per mile/km. or paying an annual additional fee, I'm okay with paying more. But again, what a dumb way to achieve similar revenues... The whole price at the pump side of the argument is utterly baffling...
     
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  16. I have to laugh at this attempt to make the electric car
    folks the victims. Sucking $7500 from the poor taxpayers to subsidize their electric cars makes these folks the prime
    example of high end welfare.
     
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  17. without reading the comments, I pretty much already know where they are going.

    i mean, this has got to be the epitome of political suicide. guessing he on his last term?

    take away one tax to add another takes a TON of money and time. good luck dude, you are going to need it!
     
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  18. Governor,you are heading down the same road as Gilmore and probably to the same end I have a Hybrid that i brought to save gas and you are trying to punish me for saving gas what kind of message does that send?
     
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