Virginia’s Gas Tax is Critical
Adequate, long-term funding is the only way to ensure safe, reliable transportation.
Transportation in Virginia is funded from a few major sources:
- Gas tax
- Vehicle registration
- Sales tax
Transportation funding requires long-term planning and comes from a mix of sources. Cutting a major source leaves our roads vulnerable. Ultimately, any loss of transportation funding means detrimental project delays.
Gas tax revenue has long been a staple in the funding mix that keeps our roads maintained, clear, and safe. We must continue supporting it to push the Commonwealth forward while also looking to sustainable funding sources for the future.
Some have suggested suspending or eliminating the gas tax would benefit Virginia consumers.
That’s misleading.
Studies show the consumer sees only a fraction of the monetary benefit from a gas tax cut while gas prices fluctuate regularly. For example, drivers might see prices dip a penny per gallon — while Virginia loses vital funding for road maintenance and repair.
Cutting the 27-cent gas tax would put an immediate strain on the transportation construction industry’s ability to maintain and update roads, bridges, highways, and more across the Commonwealth.
Eliminating the tax will not benefit the people paying at the pump. National studies confirm that soon after the tax suspension, demand increases. And when demand increases, prices rise – again. Market forces simply adjust. And, consumers are saving just a few cents in the short term while looking at years and years of infrastructure degradation.
We saw this happen in states such as New York in 2022.
Eliminating the gas tax would mean a loss of $800 million of transportation funding over the Commonwealth’s finance cycle. Even cutting the gas tax for five months – an idea that we heard in 2022 – would mean a loss of $400 million in just one year.
And consider this – out-of-state drivers would benefit from the same tax suspension. Yet those same drivers do not pay for the wear and tear they cause. Why should they be able to use our roads but not help pay for transportation improvements? More than half of diesel users are from outside Virginia, and about 17 percent of gas users are out-of-state.
This user fee is directly reinvested into maintaining and improving our multimodal transportation system – which includes roadways, transit, bike, pedestrian, and transportation technology infrastructure.
Those revenues pay for major projects, including:
- 4-95 NEXT – expected to bring more than $800 million in economic benefits to Northern Virginia. The Governor kicked of the congestion-relief project in March touting the time savings to families and businesses in that traffic-clogged region.
- I-81 Funding – addressing expanded safety and congestion measures due to heavy truck traffic on 99 miles of the 325-mile corridor. Continued funding is necessary to improve an additional 266 miles. That means more, not fewer, dollars.
- I-64 Improvements – an expansion project between Richmond and Williamsburg that could be funded entirely by the money lost to a gas tax suspension. Virginians are now enjoying the traffic relief with I-64 expansion between Williamsburg and Hampton – why would we want to postpone finishing the job?
- The Hampton Road Bridge Tunnel and supporting projects need dedicated funding to stay on schedule for targeted completion in 2025.
We have more than $7 billion in unmet transportation project needs in Virginia today. These include small projects in every locality. We need more funding, not less, to make those happen.
Virginia has come too far since 2013 in maintaining and modernizing our transportation network. We are beginning to see in every corner of the Commonwealth the direct correlation between those investments and our quality of life, economic success, and prosperity. With inflation and uncertain long-term cost estimates, now is not the time to regress, reduce, or delay the projects that are part of our six-year transportation plan.
Federal funding does not cover what is needed to continue building new roads, expanding highways, and pushing for a top-of-the-line transportation system in Virginia. Federal money is earmarked for maintenance, transit, and bridge repair. But to stay relevant, attract major new businesses, and remain a great place to live, Virginia needs to make transportation construction for new projects a priority.