Utah may hike gas tax to fund work on roads
The state's 24.5¢ per-gallon levy hasn't been increased since 1995
Two different legislative committees heard presentations Wednesday on options to raise more money for roads, including applying sales tax to gasoline purchases or taxing drivers based on miles driven.
"We have a motor fuel tax system that has served us very well the last 60 years," Rep. Wayne Harper, R-West Jordan, told members of the Transportation Interim Committee. "However, with the increased (fuel) costs and the increases in fuel efficiency, it is not an adequate tax."
For more than 50 years, the state has funded needed road projects with a per-gallon gasoline tax. The tax is now 24.5 cents per gallon and has not been increased since 1995.
Transportation officials estimate that the state needs billions of dollars to build, repair and expand highways to help relieve traffic congestion. A few needed projects include widening I-15 in Utah County, rebuilding I-80 in east Salt Lake County, and building the proposed Mountain View Corridor in the western part of those two counties, according to the Utah Department of Transportation.
The gas tax doesn't bring in enough money to fund those needs, so the gasoline "user" tax has been pushed into a general sales-tax subsidy, legislators were told.
"If we are going to have an adequate transportation infrastructure, people are going to have to pay for it in some way," Rep. John Dougall, R-Highland, told the Revenue and Taxation Interim Committee.
The Utah Taxpayers Association, meanwhile, had several suggestions. The lobby group called for implementing congestion pricing, which would result in motorists being charged to drive in high-traffic areas. London is one city that uses congestion pricing, and New York is considering it.
The taxpayers group also suggested that the state per-gallon gas tax be increased by 25 cents to double the current level. To offset that tax hike, the state's personal income tax should be reduced accordingly, Royce Van Tassel of the tax group said during committee presentations.
Doug Macdonald, head of Utah Issues, an advocacy group for low-income residents, said another way to raise money for roads would be to remove the current sales-tax exemption on fuel purchases. That would put the 4.75 percent state sales tax on gasoline sales, which would help that revenue source keep up with inflation.
Utah residents would then pay a tax of 24.5 cents per gallon, and 4.75 percent on the total gasoline purchase.
Legislators said they understand the road-funding problem, but few had suggestions for solving the issue. Sen. Ed Mayne, D-West Valley, said he would like to see a 1-cent sales-tax increase to be used for transportation.
Harper ran a bill last session that would have increased the state's gas tax. The bill ultimately failed, but he said Wednesday that he hoped to come back to interim committees in the next few months with a funding option.
"I think it's time to take a look at this to see where we want to go," he said. "Do we want to leave the system the same, or look at another proposal?"
E-mail: nwarburton@desnews.com; bbjr@desnews.com
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