Lower vehicle registration fees, higher gas taxes, new user fees, for Virginians on July 1

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Vehicle registration fees will go down $10 on July 1, but gas taxes will increase five cents per gallon as part of a two-year phase-in, and drivers will also pay a new highway use fee, so, yeah, in the end, it’s likely going to cost you more to put your car on the road.

These are among the highlights of a comprehensive transportation package to create sustainable funding for transit, rail, and roads, invest in systemic safety improvements, and support a multimodal system in Virginia, that was passed by the General Assembly and signed into law by Gov. Ralph Northam.

“During this legislative session, the General Assembly delivered on our promise to improve the lives of Virginians in every corner of the Commonwealth,” Speaker of the House of Delegates Eileen Filler-Corn said. “I am proud that, by passing this important legislation, we have made our roads safer and created a sustainable transportation funding structure, all while lowering vehicle registration fees so Virginians can keep more of their hard-earned money. These measures are more critical now than ever as we move into the Commonwealth’s economic recovery from the COVID-19 pandemic and build our shared future together.”

Not sure how Filler-Corn thinks people are going to be able to keep more of the hard-earned money. Vehicle registration fees will be going down, with a decrease in fees for motorcycles, mopeds, autocycles, and pickup and panel trucks between $2 and $10, but you’re going to be paying more for gas with the five-cent tax increase that goes into effect on July 1, and the new highway use fee, tiered based upon a vehicle’s fuel efficiency, is expected to be $19 in year one for most vehicles.

The use fee came out of a year-long study of the sustainability of transportation revenues. The study investigated the fact that the number of vehicle miles traveled by Virginians continued to increase in 2018 and 2019, while revenues from motor fuels taxes declined.

One of the major factors determined to impact the decline of revenue was the significant increase in the fuel efficiency of vehicles. KPMG, the consultant engaged for the study, estimated the loss of nearly 33 percent of gas tax revenues for Virginia by 2030 due to fuel efficiency, or approximately $260 million, resulting in transportation funding becoming unsustainable over the next decade.

“The challenge was to identify a system that would maintain incentives for fuel-efficient vehicles while creating sustainable funding that was fair for all drivers,” said Nick Donohue, director of the Office of Intermodal Planning and Investment.

“The future is here, and it is time to modernize our transportation system,” said Senate Majority Leader Dick Saslaw. “This legislation will make our roads and highways safer and, once we move past the COVID-19 pandemic, provide the revenue we need to address our key
transportation needs.”

“This legislation restructures Virginia’s transportation funding model and is based on equity and a commitment to a multimodal system,” said Secretary of Transportation Shannon Valentine. “The investments support Virginia’s economic recovery and transform transportation solutions for generations to come.”

Story by Chris Graham

         
 

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