Governor Northam Raises Your Fuel Tax Again
by Steve Haner
For the record, since the dying traditional media do not cover this, a brief note that Virginia’s motor fuel taxes will rise once again July 1. The increase will be automatic, based on consumer price inflation, because of legislation passed in 2020 and signed by Governor Ralph Northam.
Another example of the long reach of tax legislation passed under Northam is Fairfax County’s rulers just voted to impose a meals tax, something the county’s voters had rejected in a previous referendum. Before 2020’s law change, another vote of the people was required to impose the tax.
As reported about a year ago, the indexing rule coupled with a direct gas tax hike in that bill had increased the gasoline and diesel tax rates by 150% in the four years after the new law. Inflation was far lower (2.9%) in the last 12 months so the changes this time are slight, at about 1.2 cents per gallon.
It is still the case that Virginia has divided the tax into different buckets and hides the total cost imposed on drivers on its various websites. There is a retail fuel tax, a wholesale fuel tax, and a third small tax imposed to cover the cost of the program managing old underground storage tanks.
Perhaps that storage tank “fee” will be like the business license tax imposed by Virginia to fight the War of 1812 and never go away.
The combined state taxes will be 41.7 cents per gallon on gasoline and 42.7 cents per gallon on diesel fuel. The Highway User Fee collected as an alternate to gas taxes will also rise 2.9%.
A separate federal tax of 18 cent per gallon is also collected at the pump and hasn’t changed since President Ronald Reagan, if I recall correctly. Congress should just copy Virginia’s legislature and index its gas tax. Nobody notices or squawks about the incremental increases. Inflation is the government’s most powerful and opaque tax increase tool. It will work like a charm with tariffs, too.
