West Virginia’s communities stand to benefit from millions of dollars in additional funding for roadway paving if the governor’s gas tax stabilization bill passes during the special legislative session currently under way.
The “motor fuel excise tax” bill terminates the Motor Fuel Excise Tax Shortfall Reserve Fund and transfers the money in that fund to the state Road Fund to be used only for reconstruction, renovation, maintenance and repair of secondary roads. The approximate $27.3 million remaining in that fund would be distributed among the state’s 10 highway districts, based upon the number of paved road miles.
Combined with the regular $40 million paving budget for fiscal year 2010 West Virginians could see $67 million put toward roadway infrastructure, improving the quality of life, creating jobs and providing for improved economic development opportunities, said Gov. Joe Manchin.
In addition, American Recovery and Reinvestment Act funding has allowed West Virginia to put an additional $75.5 million to pave 127 more miles of Interstate Highway Systems in the state this year.
“This bill makes all the sense in the world for West Virginians,” Manchin said. “Not only would we be able to improve the roads that connect our towns with the major corridors in the very near future, but it also limits big jumps in the gas tax so we’re not adding too much state burden at the pump, while ensuring we have money in the State Road Fund to help keep up all of our roadways in the future.”
The bill limits the increase or decrease in the variable tax rate per gallon of motor fuel to no more than 10 percent, up or down, from the previous calendar year, providing greater stability on the tax portion of the price of gas for West Virginia consumers.
The shortfall fund was set up by the Legislature in 2008 to offset revenue loss to the State Road Fund that had come from a legislative freeze on the gas tax that same year. The freeze provided relief to West Virginians who were facing dramatically increasing gas prices and a subsequent increase in motor fuel tax, which was based on five percent of the average wholesale price of a gallon of fuel. However, the freeze also resulted in reductions of more than $50 million to the state Road Fund.
With the stabilization provided by the governor’s new legislation, the Motor Fuel Excise Tax Shortfall Reserve Fund is no longer needed, allowing that money to be used for secondary roads.