Governor Youngkin’s Gas Tax Proposal Passes House Committee Without $50 Rebate

Virginia legislators took their first vote Tuesday on the gas tax holiday proposed by Gov. Glenn Youngkin, nearly a month after the governor announced it and with the timeline for a final vote still up in the air. 

Last week, the House Finance Committee passed the gas tax on a party-line vote. The 12 Republicans on the committee repeatedly overruled the 10 Democrats, rejecting Democrats’ alternative proposal for a $50 gas rebate per vehicle or up to $100 per household. 

In an at-times snippy meeting, members of both parties professed their desire to help relieve some of the pain Virginia drivers are feeling from higher gas prices, but neither party appeared willing to step back from their preferred form of relief or attempt to find common ground. Even if Youngkin’s gas plan passed the Republican House, Democratic leaders in the Senate, where their party has a majority, have shown no sign they intend to pass it. 

A broad coalition of 60 business, environmental groups, public transit advocates and road building groups testified against the gas tax holiday, saying it would jeopardize long-term transportation funding without providing much help to Virginia drivers.  VTCA member Ryan Terry of Branscome Inc. testified about the skyrocketing materials prices and professional services escalation rates and the long term impact these will have on VDOT’s budget.   

Youngkin’s 150-day suspension:  26.2-cents per gallon gas tax for May, June and July before phasing it back in during August and September. It would also permanently limit how fast the gas tax rate could rise with inflation in future years (CPI adjustment), at a cost of another $40 million per year – every year.  It is expected the legislature will pass elimination of the Food Tax which brings in nearly $800 million to the transportation fund every six-year plan.  Unlike other states looking at this concept, Virginia is one of only two states with no plan to back-fill the lost transportation dollars. 

The media have a major misconception that a change in state gas tax – up or down – automatically triggers a big change in what drivers pay for a gallon of gas.  VTCA shared a comprehensive 9-year long analysis that confirms that 177 changes in 34 states didn’t have the intended effect legislators hoped for and consumers felt about 1/3rd of an impact for two weeks and gas prices are subject to market forces. 

The Senate Finance Committee will meet this week where VTCA and the coalition will again explain why the gas tax is bad policy and will put Virginia further and further behind in long-term and sustainable transportation funding.