Opinion — Gas tax relief possible
Published 12:59 pm Saturday, March 26, 2022
The 2022 Regular Session of the Virginia General Assembly adjourned sine die on March 12th. House Republicans came into this session focused on addressing the issues most impacting Virginians. While House Republicans were successful in many areas, the Commonwealth’s biennial budget remains unfinished due to the Senate Democrats inability to come to an agreement.
We have a constitutionally mandated responsibility to pass a budget to fund the government. The Republican budget provides relief that Virginians desperately need amid the stresses of inflation, high gas prices, and a possible recession on the horizon. Democrats want to force a special session which would give them an opportunity to kill any recess appointments made by Governor Youngkin.
They consistently pushed back against our policies to make schools better for all Virginians. They consistently tout the successful public schools in wealthy parts of the Commonwealth but refuse access to schools of the same quality to all students. The fight for school choice will be back and it will remain a top priority.
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The House wants to send more money back to taxpayers in the form of rebates and doubling the standard deduction. The Senate’s proposal includes slightly smaller rebates and a refundable Earned Income Tax Credit that would put an average of $500 back into the hands of low-income families.
With the inevitability of a Special Session of the General Assembly being called in order for us to be able to pass a budget, I want to prioritize the local economy and small businesses of the district.
For that reason, I am looking to connect with local business owners to learn how I can best support them and hear their suggestions for budget amendments that will allow them to not only stay afloat but keep prices as low as possible for their customers. If you are a business owner and are willing to offer your knowledge and expertise, please contact my office.
The date for the special session has not yet been announced, but it will likely be set within the next week.
In a press release on Thursday, House Democrats called on Governor Youngkin to declare a state of emergency to allow actions to be taken against price gougers. Just a few short weeks ago, every House Democrat voted against efforts to lower the gas tax to give drivers some small measure of relief.
The Senate Democrats “brick wall” caucus then killed the bill for the year.
The problem isn’t price gouging or ‘bad actors.’ Rather, it’s a tight market caused by Democratic opposition to fossil energy of any kind. Prices were already high before the U.S. rightly moved to block imports from Russia, rising more than $1 per gallon from the time Biden took office until Moscow began its sabre rattling.
Unfortunately, rather that unleash America’s own energy potential, President Biden has blocked it. Amid a bipartisan uproar over those imports, President Biden has come up with a new plan — import oil from Iran and Venezuela.
Republicans in Virginia have worked to not only ease the pain at the pump that President Biden has seen fit to ignore by lowering the gas tax, but also by ensuring that professionals, not radical environmentalists, are in charge of environmental permitting.
When President Joe Biden took office in January 2021, gas prices averaged $2.42/gallon nationwide. When Governor Youngkin took office just one year later, gas prices had surged to $3.413/gallon on average.
Governor Youngkin is proposing to use unanticipated transportation revenues to provide Virginians much needed tax relief with a gas tax holiday. The Governor will send a bill to the General Assembly in the upcoming special session to suspend Virginia’s gas tax for three months: May, June and July, and phase it back in slowly in August and September.
The gas tax would be phased back starting in August at a 50% reduction and then in September at a 25% reduction, not returning in full until October.
Governor Youngkin is also proposing to cap the annual adjustment to the gas tax at no more than 2% per year. This will protect Virginians from the hidden tax increase of inflation.
Democrats argue that this will do nothing. Meanwhile, a similar plan in Maryland led to instantly lower prices.
Revenue from the tax is deposited in the Commonwealth Transportation Fund along with a portion of the state’s sales and use tax. The Commonwealth Transportation Fund, which funds maintenance and construction for all modes of transportation, is currently realizing revenue well-above forecast and has $671.4 million unanticipated revenue in FY22 and $457.6 million unanticipated revenue FY23, for a total of $1.129 billion.
The Governor’s gas tax holiday will reduce transportation fund revenues by $437 million, meaning overall transportation funding will still dramatically increase this year.
Even with the estimated fiscal impact to the Commonwealth Transportation Fund, overall transportation funding will still grow to $4.639 billion from the original forecast in FY22 and to $4.2507 billion in FY23.
A typical family will realize savings of $106 over five months.
Del. C. Matthew Fariss represents Buckingham in the Virginia House of Delegates. His email address is DelMFariss@house.virginia.gov.