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While the federal government is still stuck in a -- state governments have been moving quickly and very creatively to get their accounts in order.
But the boldest new ideas comes from Virginia which proposes to do something -- no other state has done eliminate the state gas tax altogether.
Governor Bob Bob McDonald says the state can balance out the -- revenue by increasing sales tax from 5% to five point eight.
Here to explain.
The governor himself Bob McDonnell governor thanks for coming at first at all just due to show our viewers how much a part of their life.
The purchase of gasoline -- -- this just came out today average US household.
Dollars on -- that makes up about 4%.
Of their income before taxes so some huge chunk of everybody's in.
Well as David and thanks up for having me on you know we've got a lot of progress -- burgeoning unemployment -- though lowest the southeast and -- bad record surpluses the last couple years but.
The problem is we've got we've got aging infrastructure like every state in the country so.
We're trying to figure out what to do -- this declining gas tax eaten up by inflation and not fuel efficiency and alternative fuels.
So one of the decision -- made us look let's let's -- -- that let's replace that was something that we know has got to grow the economy which is the sales tax.
And you drive down the price of gas more people come to Virginia to buy gas that no that means more economic activity so.
That feature plus general fund plus a couple other things account for about 800 million dollars a year about a fifth year in.
It passed the house today there are cleared the first big hurdle today.
Okay but is short term -- I understand you were expecting to make about 600 million dollars from the gas tax.
-- -- short term you're not gonna add up to that amount.
-- that point 8% increase -- sales tax are you.
-- it's going from a gas tax killing a completely seventeen point five cents a year per gallon.
And replacing it with a five point 8% sales tax on top of the -- that we've gotten Avago provide a five point eight.
Generate 600 billion dollars of new money because of economic growth over the next.
Five year finally it is revenue neutral in the first year but over time David it's it's real money April for transportation.
All right now you have been criticized by a lot of green eighties who say that you have one particular add on -- your bill where you you add a what is being called an anti green 100 dollar tax on alternative fuel cars explain why you do this.
Well it's pretty simple it's like I'm all for alternative fuels I'm converting -- -- -- late.
To natural gas but the fact is that if you have.
Alternative fuel vehicle electric fuel vehicle for instance you don't pay any state or federal gas tax now it's so why you're using the road you don't contribute -- -- Maintenance and construction -- so it's just a fairness issue to make sure that gas tax payers and alternative fuel users can now pay the same about.
That actual that feature reduction removed for the house bill -- -- path so.
It's a small about a money but it's it's now not in the bill the house still of the bill the senate totally a matter of reconciling -- -- -- Governor let me ask you -- a question about health care fight -- because we have some news it to serve a lot of conservatives today which is that.
Arizona governor Jan Brewer and Ohio governor John Kasich have done a 180.
On Obama care they are now going to accept central money.
To expand Medicaid as part of obamacare.
Again that says it's a complete flip flop of where they were.
What about you and Virginia are you gonna do the same are you gonna turn around on that issue.
Now we accorded to all the federal government that.
We're not having -- Look at that -- -- considerate without dramatic reform.
Our Medicaid budget is through the -- not just in Virginia but every state America David we've got 16100%.
Over the last thirty years to total twenty -- percent of our budget.
It's already a broken system in fact pres Obama -- that three years ago.
You gotta reform -- first before you expanded so.
I think he's right and so -- asking for waivers we think they obamacare legislation needs to be well -- -- up -- to be discarded but the courts have upheld it.
And it needs to be amended to give us more flexibility -- dual eligible -- maintenance of effort and so forth so.
We're talking solely about reform right now not expansion I want to have higher quality health care for -- for more people.
But we're not gonna break the backs of our state and frankly -- we don't think the federal government debt now.
Can afford it or not gonna contribute to the national debt in Virginia.
By having the federal government claimed to pick up -- -- percent of the tab for three years and 90%.
Forever what they can't afford it they're already broke I don't think -- keep their promise even though President Obama did win Virginia in 2012 elections.
Well sure but he did what about obamacare I can tell you.
That there were a host of other factors -- what it by 2%.
And a close race but the the point is people want us to be responsible but they want us to have.
Right -- access to health care but.
This way with this kind of program.
That will break the bank in the future for our state and let's we have dramatic reform.
Is just not something I can recommend the legislature so we're not gonna -- that whatever look every governor of got to say we're say and do what they think is best for their state.
-- -- -- That's not a responsible fiscal decision right now.
And we've told the federal government we gotta reform at first.
OK and he -- -- reformer governor McDonnell will would be the first state in the union all fifty states have gas taxes if they eliminate -- They would be the first to do so governor Bob McDonnell great to see -- thank you for coming in appreciate it.
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