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Gov. Glenn Youngkin announced plans to propose legislation to suspend for three months Virginia’s gas tax in response to soaring gas prices.
If his proposal is approved by the General Assembly, motorists would see a 26-cent decrease per gallon for three months, May, June, and July, and phase it back in slowly in August and September.
Youngkin chatted with motorists at a BP gas station in Western Henrico on Wednesday after he made the announcement to reporters.
“We're seeing gas prices escalate faster than we've seen in a long, long, long time, before Russia invaded Ukraine,” Youngkin said. “This is just part of the inflationary pressures that Virginians are feeling all over — grocery prices, gas prices, utility. So we're in a moment right now where we need to do something. We need to do something real and fast.”
Youngkin said he will send the bill to the Virginia General Assembly in the upcoming special session. The proposal would also cap the annual adjustment to the gas tax at no more than 2% per year. The Commonwealth Transportation fund has more than $1 billion extra revenue than anticipated this year and next. The tax holiday will cost a little over $400 million, and the state will still have $700 million more than expected to fund road projects and fill potholes, Youngkin said.
“There's plenty of money in the system, it's time Virginians need it,” Youngkin said. “Families are hurt. We're going to go work together and get this gas tax suspended.”
The biggest hurdle to passing the legislation would likely be the Senate Democrats, who hold a 21-19 advantage. The Virginia Senate Democratic Caucus swiftly responded to Youngkin’s announcement on Wednesday afternoon.
“The Commonwealth’s transportation budget relies on gas tax revenue; in my district, the region can’t currently maintain our current infrastructure much less any new construction. Some roads even look like a war has been fought on them,” Majority Leader Dick Saslaw said in a statement. “As final negotiations take place, we need to make sure we can provide relief for Virginians while still maintaining a robust and responsible budget.”
Saslaw also pointed out that fuel costs have fallen 40 cents per gallon in the last four days.
The Republican Party of Virginia, House Speaker Todd Gilbert (R- Shenandoah) and House Appropriations Chairman Barry Knight (R- Virginia) each released statements Wednesday endorsing the proposal.
The concept of a gas tax holiday has gained traction in more than a dozen states and appears popular among many Republicans and Democrats alike. But opponents point to a Bureau of Labor Statistics report that showed that in 2020, the wealthiest 20% of Americans spent three times as much on gas as the poorest 20% and about twice as much as the second-lowest quintile – meaning that such tax breaks could disproportionately benefit the wealthy.
