Virginians are buying less gas but driving more miles. For transportation officials, that’s a problem.

By: - October 24, 2019 12:07 am

Evening rush hour traffic on I-66 westbound, as seen from eastbound lanes near Centreville, Virginia. (Creative Commons/Flickr)

For the first time ever, Virginians are paying less in gas taxes while driving more, a worrisome milestone for transportation officials concerned about how they’ll pay for roads in a more fuel-efficient future.

At a Commonwealth Transportation Board meeting in Richmond last week, state officials said they support technological advances that lead to a cleaner environment, while warning that policymakers across the country have to figure out how to replace the lost gas money.

“We’re fully on board with all of that coming forward in our future,” said Secretary of Transportation Shannon Valentine. “We’re just trying to very realistic and honest. There is a real impact to sustainability in transportation.”

Between fiscal years 2016 and 2018, vehicle miles traveled increased 3.2 percent. Over the same period, gas tax revenue was down 0.4 percent, according to a Virginia Department of Transportation presentation. Had fuel tax collections grown at the same pace as driving, the state would have taken in another $31.3 million in fiscal 2018.

Motor fuels taxes are the third-largest non-federal source of transportation funding in Virginia, generating $857.2 million out of $3.4 billion in state revenues for fiscal 2018, according to VDOT, behind retail sales taxes and taxes on vehicle sales.

The state has convened a task force to study declining fuel tax revenues and suggest potential solutions. Eventually, that could involve moving to a system that charges road users based on how many miles they drive, not how much gas they consume. In the near term, policymakers may consider tweaking the gas tax rate, which currently works out to 22 cents per gallon, or exploring other taxes and fees.

The task force is scheduled to issue recommendations later this year.

Using a forecast prepared by tax firm KPMG, transportation officials projected even steeper reductions as fuel-efficiency continues to rise and more drivers switch to electric vehicles. By 2040, the KPMG analysis showed, those developments could lead to a 62 percent reduction in gas tax collections. Diesel tax collections could drop 50 percent during the same period, the analysis shows.

“It’s a significant, significant impact,” said Deputy Secretary of Transportation John Lawson.

The transportation bill the General Assembly passed in 2013 included several taxes increased aimed at funding roads. But that legislation tied the fuel tax rate to gas prices, which have fallen significantly.

To illustrate the dilemma, Lawson displayed a chart showing how much gas tax revenue the state can expect to get from a Toyota Camry, one of the most popular cars in America. A 2000 Camry getting 23 miles per gallon would generate roughly $81.70 in fuel taxes per year.

“Step forward in time today … the same car, driving the same amount of miles, taking up the same amount of space on the road, only pays $55.27 in fuel tax,” Lawson said.

A 2019 Camry gets about 34 miles per gallon.

Valentine and Lawson said they expect the entire country to move to a new system as states search for the best model. For now, they said, Virginia needs to find a “bridge” to that point.

At-large Transportation Board Member Marty Williams asked if the state could use the annual inspection system to charge people for miles traveled by checking a vehicle’s odometer against last year’s reading.

“It’s probably so simple that it’s undoable,” Williams said.

“That is on the list,” Valentine replied.

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Graham Moomaw
Graham Moomaw

A veteran Virginia politics reporter, Graham grew up in Hillsville and Lynchburg, graduating from James Madison University and earning a master's degree in journalism from the University of Maryland. Before joining the Mercury in 2019, he spent six years at the Richmond Times-Dispatch, most of that time covering the governor's office, the General Assembly and state politics. He also covered city hall and politics at The Daily Progress in Charlottesville. Contact him at [email protected]