South Dakota panel considers fuel tax, fee increases; feedback sought

| 10/9/2009

South Dakota lawmakers know that drivers want better roads and increased capacity on state and local roadways. But they don’t know what residents are willing to pay to help build and maintain highways.

With the state in need of more than $240 million a year for road funding, the Joint Transportation Committee is looking at multiple options to help bridge the gap.

One proposal being discussed by the interim panel would increase the state’s fuel tax by 10 cents per gallon. Boosting the current rate from 22 cents per gallon to 32 cents would generate $57 million for the state’s transportation system.

Other options being floated include doubling the annual vehicle registration fee to raise $62 million and increasing the excise tax on vehicles sales by 1 percent to raise $19 million.

Committee members want to get feedback from residents on the options before meeting again Tuesday, Oct. 13, and Wednesday, Oct. 14. At that time, the panel will finalize its recommendations of increases for consideration during the 2010 regular session.

Contact information for members of the Joint Transportation Committee is available here.

Critics of the fuel tax increase say the price at the pump already is too high. They would prefer that lawmakers look elsewhere for money. Others are concerned that charging more to license vehicles is too big a blow to consumers.

Advocates for the tax increases say the state is in a no-win situation that lawmakers are trying to figure out how to get out of. Like it or not, something must be done now or roads are going to go from bad to worse. They say that waiting will only make the funding problem worse.

To view other legislative activities of interest for South Dakota in 2009, click here.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to