Gov. McDonnell Signs Transportation Bill, Raises Sales Tax

By: Val Thompson Email
By: Val Thompson Email

May 13, 2013

Virginia Governor Bob McDonnell officially signed a new transportation plan on Monday that promises to raise $3 billion for Virginia roads.

"If we were going to keep Virginia the most business-friendly state in America, we had to be able to create a long-standing solution," said McDonnell.

A bulk of the money will be raised by increasing the sales tax from 5 percent to 5.3 percent.

"I don't think the sales tax should go up," said Charlottesville resident Jeremy Williams. "People are struggling hard enough now to pay for things as it is."

Several conservatives in the Virginia General Assembly have criticized the transportation plan for the same reason, calling it a massive tax hike.

But several shoppers in Charlottesville on Monday said they would not notice an additional $3 for every $1,000 that they spend.

"It works if they do it the right way," said James Spisso. "If they spend it locally and they actually do use it for transportation for helping people get to places."

The bill directs the extra tax money to be spent to maintain highways and expand mass transit opportunities.

"(It should) help people get to jobs so that they can make more money and make the economy stronger," said Spisso.

Those buying cars will likely notice the increase more. The bill raises the sales tax on vehicles from three percent to 4.15 percent over the course of a few years.

Gary Fay, the general manager of Battlefield Ford in Charlottesville says he is not very worried about the increase, but he admits that customers will see a difference.

"They're going to see an increase in their payment," said Fay. "It's not going to be very much, financing it over a five-year term."

But Fay says drivers will save money in other ways, thanks to the new transportation bill.

"The cars are not going to have damage from potholes," said Fay.

The transportation bill eliminates the 17.5 cent tax per gallon of gas and replaces it with a 3.5 percent tax on gas purchases. With current gas prices, this represents a tax reduction for people buying gas. Gas prices would need to reach $5 a gallon to equal the current 17.5 cents per gallon tax.

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