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VA governor's proposal to eliminate gas tax

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    Gov. Bob McDonnell explains his plan

  • Duration 5:49
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Virginians gotta love -- is the governor proposed pushing now to nix the gas tax.

It is new transportation -- that works outs -- seventy cents a gallon.

Now Virginia beat average.

Cost of a gallon of gasoline is three dollars.

28 cents of this would bring it down to around three dollars ten cents -- dollars and eleven cents a month fell swoop.

But is the plan getting.

Traction with state lawmakers to Virginia -- -- governor Bob McDonnell governor good to have you but reaction have you gotten ideal.

Well you know it's it's a big and novel plan and now people are still.

Of evaluating -- -- it's primary it's a lot of use of our general fund money cutting spending and putting money into transportation.

But then they're converting the gas tax getting rid of that and converting it.

Revenue neutral ought to have sales tax which growth that's that little long term -- of -- climb because of fuel efficiency and inflation and other factors so people are still looking at a but we've had a number of major endorsements over the last couple days from business groups and some conservative leaders alleges the speaker about house is the patron of the bill.

So I think we're off to a good start but there's a lot of education to -- because we got to fix our transportation system in Virginia.

You know what's -- -- arrest resulting in the water right now because your colleague in Louisiana Bobby Jindal.

Wants to get rental taxes -- maybe I did the sales tax to.

To compensate.

But isn't that kind of -- -- today Paula mean taxes.

Are gonna have to be paid through some means what he's.

-- say prudent tax policy is based on an idea that.

Taxing consumption.

As opposed to means of production like -- -- is a better way to go I think that's why bodies adults looking at that in.

In Louisiana but you know transportation.

Is the quality of life issue it is a business recruitment issue and that's been on -- for about twenty years in Virginia -- -- a great day conservative.

Up principled way to do that -- public private partnership by these bonds.

I've cut spending and put money to transportation.

It was still got a problem but particularly in our major metro areas -- I think this is a -- -- Kill one tax -- to -- that actually grows with economic development and that'll raise more money for roads.

All right -- the seventeen cents a gallon you lose on the state tax on gasoline.

You're gonna have to make up for at least initially with a fairly substantial hike -- in sales taxes him.

Well it goes from 5%.

To five point 8% that's.

With the rounding error is essentially a revenue neutral conversion in year one.

But that it grows because economic activity on the -- sales tax grows faster than the gas tax which is going down as I mentioned because of inflation and.

-- -- I don't -- bill's sponsor our governor you don't buy the argument that that a tax on consumption of any sort limits that consumption and actually brings on.

The slowdown that would would that would stifled the money you expect to get.

Now and I don't I don't buy themselves some have suggested that's why the gasoline tax is good because people buy less gas and then they.

The air is is clean that's not the policy reason you raise you tax things to raise revenue.

To provide got a government services and so that's the purpose other not to drink those kinds of policies but -- what other hole -- goal here is.

Is -- great a a way to have a sustainable.

Method of finding our roads and bridges and other transportation assets for the future so we can -- more jobs.

So that businesses will come to locate here sought to -- -- we'll start up here so families can spend more time with their with their children parents.

And that's the whole -- -- do -- it away consist went our conservative principles like it's it's a different idea.

That -- should be afraid of new innovative ideas that's what other governors are doing in the Republican Party they're great.

More a common sense ways of taxing and this is another idea that I hope will work.

I'm Chris Christie New Jersey has nixed his own tax -- plans for the time being he says because of our -- city and its limited his options closed.

The cleanup that's necessary.

So is there a little battle going on the Republican Party about -- you're going to be a party of tax cuts.

But the party that cools -- on tax cuts well.

Well there are some states there are -- have that chronically high taxes.

New Jersey would be one Chris Christie's got done a good job rated and spending -- looking at some.

Tax reductions there I've been a very low tax state to start with but -- still cut.

Fair number of buy individual.

Taxes by new preferences and exemptions over the last couple years so.

You know my job it's bad -- cutting spending we've got about a billion dollars and reallocate -- that spending.

Generate a billion for -- surpluses and because we got -- lowest second lowest unemployment rate east of the Mississippi.

So that's the way we're brought in Virginia -- every governor's got to make the decisions that are best for their state and -- more jobs -- now that's how you grow revenues.

The president is saying if it comes to break on this debt ceiling -- republicans' fault because they would risk our financial credit rating and good standing.

To make a point on spending when even around.

I'd say that's.

Nonsense to some degree -- because for thirty years.

We have over spent over promised over borrowed and now we're broken now the bills are -- Now we've got a democratic administration with no courage and no guts and no leadership when it comes to cutting spending.

And reforming entitlements.

And paying our bills so.

To use this had to blame Republicans.

I think is is irresponsible we cannot keep borrowing at this rate.

We just jumped up they got national debt four trillion dollars on New Year's Day.

With no end in sight so somebody's gotta say enough is enough and I think they need to start evidence serious discussion among -- the White House about how we're gonna cut spending.

Governor thank you very much.

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