Only the state sales tax and vehicle sales tax accounted for larger shares of the fund, which totaled $ 3.6 billion in fiscal 2020 and $ 4.1 billion in fiscal 2021. Waiving the gas tax for the first quarter of state fiscal 2023 that started July 1 would have significantly decreased money for building, maintaining and repairing Virginia’s highways and bridges.
However, the optics of defeating the tax cut that Youngkin proposed and the Republican-controlled House supported — especially with gasoline at record prices — aren’t good. At least not for the Democrats.
Popular zeal to eliminate a hated tax has trumped sound budgetary policy before in Virginia. In the late 1990s, Jim Gilmore convincingly won election as governor and swept in an all-Republican statewide slate largely on his pledge to end the personal property tax Virginians paid on their cars and pickup trucks.
Democrats warned at the time that the scheme to phase out the locally collected tax and then reimburse cities and counties for lost revenue with state funds was not sustainable, and they were right. By 2001, even some legislative Republicans were blaming a merely partial cut in The personal property tax for persistent structural imbalances in the state’s general fund. Three years later, the General Assembly voted to cap the car-tax phaseout as part of a comprehensive package of tax reforms.
But in the 1997 gubernatorial campaign, the Democrats’ logical rebuttals on the car tax issue did them no good. Their explanations were no match for Gilmore’s simple, unambiguous and powerful “No Car Tax” mantra because in politics, if you’re explaining, you’re losing.
In this year’s one-day June 17 session to consider Youngkin’s vetoes and amendments to the belated two-year budget, Democrats argued for their own proposal to provide registered Virginia automobile owners $ 50 (or up to $ 100 per household) as an alternative to the GOP tax cut.
There were reasonable talking points behind their unsuccessful idea. Direct payments from the state would go only to Virginians out-of-state motorists passing through Virginia would reap the same benefit as Virginians from a tax cut. guarantee that consumers would realize the 26.2 cents of savings on each gallon because gasoline distributors, who pay the tax, might not pass along the savings in the price they charge retailers, and retailers might not pass along any reduction they receive to end users at the pump. There’s also the economic argument that suspending gas taxes only exacerbates the underlying problem by increasing demand for a limited global supply of fuel.
But those explanations don’t leap off the page of unsolicited campaign hit pieces that fill mailboxes, or television, online and radio attack ads the way the biting message of voting to deny Virginians tax relief in times of record fuel prices and runaway inflation does.
Youngkin previewed how Republicans will weaponize the gas-tax vote next year in a tweet he sent from his personal account on the same evening the Senate defeated the proposal.
Worse still, the Democrats’ stand looks even more pointless and out-of-touch because one of their own — President Biden — called on Congress to suspend the 18.4 cents-per-gallon federal share of the gasoline tax and asked states to also suspend their gas taxes.
Democrats hold 21 of the state Senate’s 40 seats. The loss of just one vote allows Republicans to prevail on tied floor votes because Lt. Gov. Winsome Earle-Sears (R) casts the deciding vote with the chamber deadlocked 20-20. But Republicans , who now control both the governor’s office and the House of Delegates, have been licking their chops since last fall at the prospect of wiping out the Democrats’ tenuous Senate majority and consolidating their hold on state government in the 2023 legislative elections.
The GOP will keep the vote against the gasoline tax holiday evergreen and feature it in attack ads a year from now to remind votes that Senate Democrats voted against lowering gas taxes when inflation was wrecking family budgets back in 2022.
And the Democrats will then have to explain the compelling budgetary and operational context of their position, which surely will not play in the heat of a political campaign.