Grover Norquist opposes ‘job-killing’ Virginia gas tax indexing

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Michael Bastasch DCNF Managing Editor
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Americans for Tax Reform president Grover Norquist sent a letter to the Virginia state legislature on Monday repudiating a reform effort to index the state gas tax to inflation.

He blasted the proposal as a “job-killing tax increase” and said it violates the anti-tax hike pledge many state legislators have signed.

“[V]oting to index the gas tax to inflation, without any complete offsets, would be in clear violation of the promise you made to your constituents and the people of Virginia to oppose any and all efforts to increase taxes,” Norquist said in the letter.

“For those in Richmond who have signed the Taxpayer Protection Pledge, I would remind you again that this is a clear violation of the commitment you made to your constituents,” Norquist added.

The Richmond Times Dispatch reported that Republican Virginia Gov. Bob McDonnell is considering a proposal that would allow the gas tax to rise with inflation. (RELATED VIDEO: Norquist spars with Jim Cramer on tax hikes)

“So we’re looking at whether or not it makes sense — even though it’s a declining revenue source anyway because of [fuel efficiency] standards and alternative fuels its still going to be a declining revenue source no matter what you do — but whether or not if we’re going to keep it, whether or not it should fluctuate with economic activity like every other tax in Virginia,” McDonnell said.

“By indexing the gas tax to inflation, it would create a new fuel tax regime, which would raise taxes on countless Virginia families and businesses, as well as put future tax increases on autopilot,” Norquist said.

Virginia drivers pay some of the lowest gas taxes in the country, according to the American Petroleum Institute, with a state tax of only 17.5 cents and a total gas tax of 38.5 cents, once other state taxes and the federal tax is included.

The national average for the gas tax was 49.3 cents per gallon in October 2012, including all state taxes on gasoline and federal taxes. The average state gas tax was 21 cents per gallon.

Virginia even has the lowest gas tax among its neighbors. For example, North Carolina has a  56.2 cent gas tax, West Virginia has a 51.8 cent gas tax and Maryland has a 41.9 cent gas tax.

Virginia’s gas tax hasn’t been increased since 1986, leading some to say an increase could bring in needed transporation funds.

Republican state Senator John Watkins proposed raising the state’s gas tax while lowering the income tax and eliminating tax credits and exemptions, which he says will raise $734 million to pay for road construction.

“Increasing the gas tax by indexing it to inflation is a bad business practice for Virginia,” Norquist said. “The transportation woes Virginia faces are not because of the gas tax. Richmond has spent too much money; in other words, it’s a spending problem not a revenue problem.”

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