News and Views

VBT : Failure to Pass SB 742 Could Mean Higher Tolls for Hampton Roads

At the conclusion of the 2016 Virginia General Assembly, those expecting continued transportation improvements were disappointed by the failure of the House to pass Senate Bill 742 (SB 742). Sponsored by Virginia Beach Sen. Frank Wagner, the bill would have established a crucial change to the regional gas tax in the Hampton Roads area.

Gas is currently taxed at a percentage of the price and low fuel prices have cost the region millions of dollars in potential revenue that could go to the construction and repair of roads and bridges. SB 742 would have made funding far less susceptible to changing oil prices. The bill proposed a flexible tax on gasoline ranging from a floor of $0.05 per gallon to $0.14 per gallon. This price floor and flexibility would ensure transportation revenue to the region and limit the burden to drivers in the event of high gas prices. The bill would similarly increase the gas tax in Northern Virginia.

On the surface, low fuel prices and low taxes sounds appealing. But as Wagner argued, historically low gas prices enable us to take responsibility for the needs of future generations, with minimal pain at the pump. The failure to pass this bill forces leaders in Hampton Roads to strongly consider something else: introducing new and increased tolls.

The 2013 General Assembly established funding for regional infrastructure improvements in Hampton Roads, when few predicted an impending plummet in gasoline prices. As the percentage-based gas tax leads to decreased revenues, the need for regional infrastructure funding continues to grow. Area leaders are left with two choices: slow the construction pace and incur higher costs over a longer period of time, or introduce higher tolls to remedy the gridlock in one of the most congested regions of Virginia.

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