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Report: Virginia Gas Tax Elimination Was Not Passed On To Consumers – McDonnell Not Truthful on Data

When Virginia Governor Bob McDonnell strong armed Virginia’s lawmakers into a massive tax increase, one of the “selling points” the McDonnell Administration used to spin the financial benefits for Virginians was that the gas tax would drop by 6 cents, saving consumers a lot of money.

Most of us were skeptical. Would there actually be a drop of $.06 on July 1, 2013 or would the distributors and stations absorb the decrease in higher revenue for themselves?

If you predicted the latter, you were right.

Looking back at the data, we see the real story:

In June 19, 2013, Governor McDonnell sent out a press release gleefully quoting the expected 6 cent drop in the price of gas. Quoting a report by AAA Mid-Atlantic, the Governor announced:

AAA Finds Historic Virginia Transportation Plan Will Lower Gas Prices Across Virginia

AAA: “Soon Virginia motorists may find themselves in one of the coveted five most affordable states in which to fill up… The difference should fill the pockets of Virginia motorists”

“After July 1st (just 12 days away) with the implementation of Governor McDonnell’s transportation funding plan, Virginia retail gas prices should begin to drop by about six cents per gallon as the commonwealth’s retail gas tax is replaced with lower tax at the wholesale level. In contrast to the current 17.5 cents per gallon tax, The Virginia Petroleum, Convenience and Grocery Association (VPCGA) is estimating Virginia motorists will end up paying a total of 11.7 cents in taxes and fees for a gallon of gasoline through the end of the year (that figure includes the Virginia Petroleum Storage Tank Fee of six tenths of a cent)…


The difference should fill the pockets of Virginia motorists according to the America Automobile Association (AAA)

Virginia’s historic fuel tax policy transformation should give consumers just shy of a dollar more in their bank accounts with each fill up


So, are you enjoying your bonanza of savings at the pump?

Let’s look at the data:

On June 20, 2013 the average price of a gallon of gas in Virginia was $3.43 and the prices started a brief decline which was unrelated to the tax decrease that was still pending. On July 3, 2013 the average price of gasoline in Virginia had fallen to $3.34, a drop of 9 cents!

So that would seem to prove that there was actually a savings at the pump that was more than the promised 6 cents.

But that is not true.

On June 29, 2013 the price of gas had fallen in Virginia to $3.37 and it was still declining prior to the “tax drop”. And it fell another penny on June 30 to #3.36. So on July 1, the price went from $3.36 to $3.35. The promised 6 cents turned out to be only a penny. But the price was declining anyway so was there any savings passed on to consumers? Even a penny?

Let’s look at the National Average for the same time span to see what effect Virginia’s tax reduction had on the price of gas in the Commonwealth compared to the country.

The chart below from Virginia Gas Prices shows the price of gas in Virginia in blue and the National Average on the red line.

us-VA Gas Prices

This chart shows average prices in Virginia and the Nation over the past 90 days. And we have already established that prices in Virginia declined between June 20 and July 3 by a total of 9 cents. As you can see, there was also a decline nationally during the same period. In fact, the rise and fall of prices statewide and nationally follow the same pattern of fluctuations. You will also note that Virginia was and still is below the National Average and a lot of that has to do with total tax, formulation requirements and proximity to refineries.

So how much did gas fall nationally between June 20 and July 3? Nationally, the average price on June 20 was $3.60 and on July 3 the National Average was $3.49 – a drop of 11 cents per gallon.

So statistically, gas dropped nationally 11 cents and Virginian’s only managed to see a drop of 9 cents despite a tax decrease of 6 cents per gallon.

You would think the Governor would be furious that he was made to be a liar, right?

Not exactly.

Governor McDonnell is actually happy with the non-existent tax decrease.

Here is how he spins it in an August 26 Press Release:

            Speaking about the report, Governor McDonnell remarked, “Gas prices are falling across the Commonwealth and that is good news for Virginians. After nearly three decades of gridlock we came together this year and passed a historic bipartisan transportation funding solution which reduced the tax on gas, and now motorists are seeing the results at the pump. Our bold action on transportation means that new road, bridge and rail projects are underway across the Commonwealth. Virginians are spending less on gas and will soon be spending less time stuck in traffic.”

Governor McDonnell’s landmark transportation plan, passed by the General Assembly this year, reduced the gas tax at the pump in Virginia by 6 cents per gallon.  A year ago, the average price for a gallon of regular unleaded fuel in Virginia, was $3.60, or 14 cents below the national average.

Sorry, Governor. The data tells a completely different story.

The price of gas in Virginia has remained pretty constant compared to the national averages. Virginians have not seen a decrease at the pumps due to the tax decreases and, if anything, the prices in Virginia are actually up when compared to the national average. And two weeks after the tax decrease the price in Virginia shot up 17 cents to peak at $3.50 per gallon.

This tax decrease is nothing more than smoke and mirrors and a lot of spin trying to pretend there is some financial benefit for Virginians.

There was not even a penny.

What we really need is an investigation into why the tax decrease was not passed on to consumers.

Not more spin from the Governor.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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