Virginia Legislators Agree to Fuel Taxes, not Tolls, to Fund I-81 Improvements

It was not supposed to turn out this way. As posted in January, Democratic Gov. Ralph Northam agreed to back Republican legislation to toll all lanes of Interstate 81 to fund improvements on the 325-mile corridor, heavily used by trucks, from West Virginia to Tennessee. However, strong opposition from the trucking industry caused the legislature to reject the funding options for the Interstate 81 Corridor Improvement Plan.

Northam rescued the plan by proposing amendments to Senate Bill 1716 and House Bill 2718 on March 28 after the General Assembly couldn't agree on a funding source during a reconvened session. 

On April 3, both the House and Senate agreed to accept the amendments. According to WHSV, the new 2.1 percent increase in the motor fuels tax along I-81, which amounts to a new regional fuel tax similar to the ones in Northern Virginia and Hampton Roads, will amount to about 7 cents a gallon.

The amendments also "increase tractor-trailer registration fees (proportional to the weight of a vehicle) and imposes a 2.03% tax hike on diesel fuel and the rate of road tax (a quarterly surcharge on the diesel tax on trucks weighing more than 26,000 pounds)," reports Onofrio Castiglia for The Winchester Star (source article).

"Virginia taxes gasoline at 22.4 cents per gallon and diesel fuel at 23.7 cents per gallon. Under Northam’s amendments, the state tax on diesel would rise to 40.5 cents per gallon over a three-year period," reports Kathleen Shaw of the Capital News Service. She adds that the road tax is charged to truckers even if they don't purchase diesel fuel.

"In an effort for support from lawmakers across Virginia, Northam's amendment established dedicated funding of $151 million for 81, but also $40 million for I-95, $28 million for I-64, and $20 million for the Northern Virginia Transportation Authority," according to WHSV. In addition, $43 million is reserved for investment in other interstates as prioritized by the Commonwealth Transportation Board, according to the governor's office.

"This historic package will ensure $2 billion in improvements to this important corridor are implemented, while also generating critical revenue for interstates across the Commonwealth," said Northam in an April 3 statement on the conclusion of the reconvened session.

Hat tip to Jim Wamsley.

Related in Planetizen:

• Tolls, Not Gas and Sales Taxes, Will Fund I-81 Improvements in Virginia, January 13, 2019
• Big Changes Proposed for I-81 in Virginia, October 28, 2018