If Virginia Democrats have their way, increases in the State’s gasoline and sales taxes will hurt the poor precisely at the same time as the economy is slowing down, gasoline prices are higher than ever, and many States are looking at reducing the tax burden and government spending in order to aid a troubled economy.
So says a Virginia-based not for profit organization:
“The report by the Commonwealth Institute for Fiscal Analysis, a nonprofit think tank focused on how fiscal decisions impact low-income Virginians, warned against sales and excise tax increases because they would disproportionately affect the state’s low-income residents.
“According to the study, the bottom 20 percent of Virginia wage earners — those making less than $18,000 a year — pay more in sales and excise taxes than all other income groups.
“‘A combination of the sales and excise tax increases being discussed could approach $100 in additional annual expense for Virginia’s lowest-income households,’ Michael Cassidy, the institute’s executive director, said.”
In other words, gasoline and sales taxes are regressive, and hurt the poor who have the drive the furthest and most often, and need every last dollar when they do go shopping.
The proposals are attempting to find a way to finance a transportation budget, which was recently found to be unconstitutional by the State’s Supreme Court:
“The General Assembly passed a landmark package last year to pump $1.1 billion a year into transportation across Virginia. Regional authorities were set up to collect $400 million annually in Northern Virginia and $200 million annually in Hampton Roads… But in a unanimous decision, the state Supreme Court ruled Feb. 29 that the regional authorities could not constitutionally levy taxes and fees because they are not elected bodies.”
Of course, left out of the Washington Post’s story is the fact that this ruling was a victory for Virginia taxpayer rights, and prevented the Northern Virginia Transportation Authority from ever again levying taxes and fees. The precedent was clear: taxes may only be raised by the authority of the State Legislature, and that body may no longer delegate that authority out to unelected officials – a clear end to the trap and tax method of raising taxes without voting on it.
Additionally, bureaucrats could no longer get away with increasing the tax burden on citizens by calling such an increase a “fee”, another win for Virginia taxpayers. According to the Court, those too had to be voted upon by the State legislature.
Now, it appears Democrats are angling to do just that, whether it be by raising the gas tax, the sales tax, or fees.
On the other side of the aisle, Republicans are opposed to raising taxes statewide, are looking at a proposal for localities which suffer from congestion taking care of transportation themselves:
“House Republicans, led by Speaker William J. Howell (R-Stafford), oppose any statewide tax increases. Instead, they want to revisit regional solutions for congested Northern Virginia and Hampton Roads, this time by allowing local elected governments to enact tax and fee increases.”
Speaker Howell’s case is bolstered by the fact that Virginia only ranks 31 in the nation in traffic congestion; most of the traffic is centered in Northern Virginia and Hampton Roads. His would be a more sensible solution insofar as it would not place the burden upon the entire State to fix localities’ roads. It would also provide those localities an opportunity to identify ways to finance transportation budgets without increasing the tax and fee burden.
Of course, Republicans in the Virginia legislature have burnt Virginians on taxes before, such as when many Republicans in the State House voted in favor of a $1.6 billion tax increase in 2004 with Speaker Howell’s permission.
Clearly, it will be up to Republicans in the lower House of Delegates to hold the line on any statewide tax increases, and to prevent increases in the sales or gasoline taxes which seek to finance a transportation budget on the backs of the poor.
ALG Perspective: In Virginia, there are no easy answers for addressing traffic congestion, but enacting regressive gasoline and sales taxes is certainly not the way to go. Insofar as those traffic problems are localized, the localities so affected should find ways to ease congestion by constructing more overpasses, widening roads, etc. and funding it by cut spending in other areas. Local problems can and should be addressed with local solutions
