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Why Virginia's Gas Tax Will Go Up After The New Year

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Gas will be a bigger drain on Virginia drivers' bank accounts come next year.
Mike Mozart: https://flic.kr/p/nPpf9p
Gas will be a bigger drain on Virginia drivers' bank accounts come next year.

Virginia drivers are about to start paying more for gasoline. It comes as an unintended consequence of the landmark transportation agreement from last year.

It wasn't supposed to happen this way. When Republicans and Democrats struck a deal last year to fund transportation improvements, one key piece of revenue was supposed to come from Congress: the Marketplace Fairness Act, which created a way to collect taxes from Internet sales. The bill cleared the Senate, but not the House.

That means the gas tax in Virginia will go up from 3.5 percent of the wholesale price to 5.1 percent.

“Even with that small gas tax increase, Virginia’s gas tax is still one of the lowest in the country," says Bob Chase, president of the Northern Virginia Transportation Alliance. “And perhaps the Internet sales tax might cost some people a lot more. So it’s really hard to say how if affects the average taxpayer.”

One group that is likely to lose are advocates for transit. Lisa Guthrie of the Virginia Transit Association says public transportation projects will get $5 million a year instead of $25 million a year.

“That’s a deficit of $20 million per year — certainly not what the General Assembly envisioned for an increase in transit funding when they passed House Bill 2313," Guthrie says.

So what does that mean for transit?

“Local governments will have to decide if they want to increase funding or if they want to decrease services and offer fewer transit options," Guthrie says.

Unless Congress takes action, the gas tax in Virginia will go up on Jan. 1.

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