Governor's transportation plan filled with pot holes

Governor Bob McDonnell has put out his plan for transportation funding and, as was true with his earlier privatization plans for ABC stores, it looks like it was designed by a drunk dodging pot holes on I-81. The plan eliminates Virginia's 17.5¢ gas tax and "replaces" it by jacking the state sales tax up from 5¢ to 5.8¢. Among other provisions - vehicle registration fees would go up and alternate fuel vehicles would be subject to a tax of $100 per year.

On the smoke and mirrors side of Bob's ledger, the plan anticipates $1 billion in revenues from an Internet sales tax that is anticipated in legislation pending in Congress. That's all well and good except (1) Congress hasn't shown a great propensity to pass legislation and who knows how this will proceed; (2) these funds, assuming Congress acts, will be there irregardless of how the Commonwealth funds transportation; and (3) using all these funds for roads will deprive schools, mental health, public safety, and other programs of the General Fund of their fair share.

One question for which I haven't seen the answer - if the gas tax is eliminated, will gas be subject to the new 5.8% sales tax just like any other good? If so and assuming $3.50 per gallon, the tax would be 20.3¢ and index the tax to gas price - probably a good way to address funding.  Depending on how this is answered might negate some of the questions below while raising others.

So, let's look at a few of the potholes in the governor's concrete cracking idea:

• Would out of state motorists stopping for fuel get a free ride on Virginia's roads?
• Why hit alternative fuel vehicles with a $100 annual tax if the gas tax is eliminated? This annual tax may make some sense if the gas tax is retained but under the governor's proposal it unfairly punishes owners of alternative fuel vehicles.
• Virginia's gas tax is already lower than the taxes in surrounding states.
• If the gas tax is eliminated, will the tax for diesel used by passenger cars like the popular Jetta TDI also be eliminated?
• The gas tax is a "user fee" for folks utilizing public highways. Eliminating the gas tax shifts it away from drivers to non-drivers and those who drive less and are efficient in their use of the roads.
• The plan sounds like it will generate lots of new money (assuming the Internet sales tax goes through) but according to many analysts it still falls $1 billion short of what is really needed to upgrade roads in NOVA, Hampton Roads, and other congested highways like I-81.

Some have said Governor McDonnell has put out a bold plan that is "outside the box." Yeah, maybe. His plan may contain a few good ideas. But, beware of the potholes.