From Deseret News archives:

Gas prices pinch budgets

Utah governments forced to fund the big increases

Published: Friday, Aug. 26, 2005 5:58 p.m. MDT
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Getting rid of some of the gas guzzlers in the fleet is a possibility, especially if fuel prices continue to climb. Saltzgiver said vehicles that run on alternative fuels cost about $6,000 more than a regular sedan, making them cost-effective only if gas hits $3 a gallon.

Still, there are limits on what the state can do. "You can't go from a Crown Vic (Ford Crown Victoria) police car to a Honda unless they ask for it," Saltzgiver said, noting that while a hybrid might not be useful for police chases, they could be used for more routine work.

The state, as well as other government entities, does not pay state or federal taxes on gasoline, which saves about 43 cents a gallon. Plus, Utah has negotiated volume discounts that cut the price at the pump by about 10 percent.

Even so, the state is having to dip into reserves to pay for gas. And higher gas prices don't translate into more tax revenues for the state. The gas tax is the same no matter how much gas stations are charging — 24 1/2 cents a gallon — and higher prices have caused consumers to reduce their time behind the wheel.

Saltzgiver's operation, part of the state Department of Administrative Services, passes the extra costs onto the state agencies that use its services.

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More money spent on gas means less for everything else, said the governor's budget director, Richard Ellis. "It's significant," he said. "There's not a lot we can do about these fuel impacts."

Utah's cities and counties are facing the same dilemma.

Salt Lake City, for example, faces a $300,000 budget gap because its estimates were too low, even after trying to factor rising gas costs into this year's budget.

City bean counters allocated $1.7 million for fuel in all city vehicles, excluding those used at the Salt Lake City International Airport. If gas prices remain where they are now, the city now expects to pay $2 million in fuel, leaving it short $300,000, Department of Public Services finance director Greg Davis said.

The rising gas prices are also putting a dent in Salt Lake County's budget to run its 2,200-vehicle fleet.

Fleet fiscal manager Craig Miller said it's too early to nail down any specifics on how much the division will have to shell out this year in extra gas. Most of the cost, he added, is simply being passed on to user agencies like the sheriff's office and other cities that contract with the county for vehicles.

"We're seeing the impact of that in a dramatic fashion," Miller said. "Everybody feels it."

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