Killing Gas Tax Helped Drivers, State, says Virginia Transportation Chief

Sean T. Connaughton, Virginia's secretary of transportation, said Wednesday that the elimination of the state's gas tax is proving to be a great benefit to the commonwealth's residents.

Connaughton spoke to more than 250 people attending the fifth annual Business Forum Luncheon hosted by the Museum of the Shenandoah Valley.

Connaughton spoke on the topic of the $17.6 billion bill that addresses the major transportation crisis facing Virginia.

Connaughton, who oversees seven agencies including the Virginia Department of Transportation, Department of Motor Vehicles, Virginia Port Authority and the Virginia Commerical Spaceflight Authority, first spoke about the importance that transportation plays.

"Forty percent of jobs and economic activity in this state are tied to the industries that have to rely on our transportation system," he said. "That's agriculture, which still remains the largest industry in Virginia, mining, manufacturing, logistics."

He said that the state's gas tax, which was the largest source of revenue for Virginia, but had not been raised since 1986, was facing two problems: the higher cost of crude oil and asphalt used to construct roads, and the introduction of fuel-efficient vehicles.

"The last two years, it's [gas tax revenues] declined, even when there's more people driving and more miles being driven," he said.

They had used every method they could to raise more money, he said. They were facing a funding crisis. Connaughton said they were predicting they were going to run out of money in 2017. But then he helped come up with a radical proposal.

He would get rid of the gas tax completely and raise the sales tax in its place.

"Through a lot of fights, the House went one direction, the Senate went the other, we got them together in a compromise that led to this historic bill that lowers the gas tax," he said. "We've actually lowered it to a sales tax at the wholesale level, which is almost equivalent to 10 or 11 cents per gallon."

Connaughton said the new gas tax, lowered by about 6 ½ percent, is now the second lowest gas tax in the nation, bested only by Alaska.

"And we all know they make the stuff up there," he joked.

He said it also resulted in Virginia now having between the third and fifth lowest gas prices in the country. The revenues generated for transportation now are much broader, deeper and well-founded, he said.

"Two years ago, our six-year program, we were looking at $10.5 billion being spent throughout the state," he said. "Now, it's $17.5 billion. So we have a $7 billion increase."

Connaughton said this money will go into repairing roads including Interstate 81 -- eventually widening it up to at least three lanes in either direction -- and fixing bridges.

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