Virginia Senate Approves Indexing Gas Tax for Inflation

AASHTO Journal, 17 February 2012

Virginia’s Senate approved a bill Tuesday that would automatically increase the state’s per-gallon gasoline tax each year at the rate of inflation.”The state’s gasoline tax has been set at 17.5 cents per gallon since 1986,” The Free Lance-Star of Fredericksburg reported. “In recent years, repeated attempts to raise the tax, or make it a percentage sales tax, have failed in the House of Delegates.”

The indexation effort is contained in a larger transportation bill sponsored by Sen. Frank Wagner, R-Virginia Beach. Wagner’s bill proposes using the U.S. Department of Labor’s “producer price index for other nonresidential construction” to annually adjust the fuel tax that supports transportation investment in Virginia.

A fiscal impact statement estimates indexing the tax could generate an additional $7.7 million in 2013, and up to $124 million by 2018.

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