West Virginia OKs fuel tax freeze

| 7/29/2008

Truckers and other drivers who fuel up in West Virginia will be spared from a scheduled fuel tax increase. Gov. Joe Manchin signed a bill into law early this month to stop an increase in the state’s 32.2-cent-per-gallon fuel tax rate that was scheduled for Jan. 1, 2009.

West Virginia law ties the state’s diesel and gasoline tax to the average wholesale price of fuel. The tax, which is based on the average wholesale price between July 1 and Oct. 31, can change at the first of each year.

The current wholesale rate is 11.7 cents. The base tax on fuel is 20.5 cents.

Approved during a special session in late June, the bill – HB218 – caps the state’s wholesale fuel tax. To help make up for the loss of tax revenues for transportation, the measure earmarks $40 million to be routed from the state’s general revenue fund to the Division of Highways.

The temporary freeze is expected to save consumers 6 cents per gallon come the first of the year.

Critics say the tax freeze will impede efforts to keep up with road work and repairs. Car and truck drivers ultimately will pay the price for a few dollars saved at the pump, they say.

This marks the second time in three years a scheduled fuel tax increased has been delayed. Manchin stepped in during the aftermath of Hurricane Katrina to impose a moratorium that prevented an expected increase of 3.8 cents per gallon on Jan. 1, 2006.

To view other legislative activities of interest for West Virginia in 2008, click here.

– By Keith Goble, state legislative editor