CHARLESTON, W.Va. — Although Governor Jim Justice has modified his original proposal of raising the state’s gasoline tax by 10 cents a gallon, the lowering of that proposal still isn’t drawing a smile from gasoline retailers in the state.
“I think what everybody is trying to get at is when the price is low, okay maybe a little bit more tax won’t hurt,” said Jan Vineyard of the West Virginia Oil Marketers and Grocers Association. “But when the price is high, a tax increase is devastating.”
The biggest issue for raising the tax, at least according to Vineyard, is the way gasoline is marketed, Every station has a huge sign proclaiming the charge for gasoline by the gallon. No other product gets that kind of advertisement and Vineyard said it becomes a psychological barrier even when the difference is only a penny or two.
“The lower the price the less difference it make, the higher the price–even two cents makes a difference,” said Vineyard on MetroNews Talkline. “There are studies that show us people will cross a very heavily trafficked highway and go to the other side. Studies show us people will drive several miles to save two cents when the price is higher.”
Governor Justice in a modified proposal to fund his road construction plan asked lawmakers for a 4.5 cent increase in the tax. Vineyard said what people aren’t considering is another part of the same bill which will change the adjusted gasoline tax rate which is set annually based on the average gasoline tax during the year. She said the modifications being proposed to the plan make the 4.5 cent per gallon increase more like an eight cent increase.
“We had a Senator in favor of the tax who said he always fills up in Wytheville, Virginia anytime he’s going south. We hear that all the time,” she said. “That price sign allows you to buy elsewhere.”
The issue is magnified in border counties where it’s only a few miles to save 10 to 20 cents on a gallon of gas. Supporters of the governor’s tax increase say those who pay it are okay with the higher price if they see improved roads. Vineyard disagreed. She said while people will say they are okay with a tax increase to fund roads, they’ll still seek the lower price even if it’s out of state. She said history also shows when they travel to another state to buy gas, they typically will buy other items while they are there and do their shopping and eating in those states as well.
As for the roads, Vineyard served on former Governor Earl Ray Tomblin’s Blue Ribbon Commission to study ways to improve road funding. She said there were a myriad of suggestions in the study including increased DMV fees, which is also one of Governor Justice’s proposals along with more creative financing of the Turnpike toll revenue and increasing the sales tax on automobiles. An increase in the tax on gas, according to Vineyard was never endorsed.
“There’s a lot of different ways to bring revenue in without making us uncompetitive on our borders,” she said.