Louisiana bill would add revenue for road work

By Keith Goble, Land Line state legislative editor | 4/15/2015

An effort underway in the Louisiana Legislature would raise about $120 million more for local roads throughout the state via the first fuel tax increase in three decades.

House Transportation Committee Chairwoman Karen St. Germain, D-Plaquemine, is behind a bill to increase the state’s fuel tax to help pay for work on local projects.

Louisiana now collects a 20-cent tax on each gallon of fuel sold in the state. The tax has remained unchanged since 1984.

Local governments claim 1 cent per gallon to fix and maintain roads and bridges, as well as other projects. The rest of the revenue is dedicated to the state’s Transportation Trust Fund.

St. Germain’s bill would increase the state’s fuel tax rate by 4 cents per gallon to 24 cents. The new revenue would be routed to the Parish Transportation Fund for local road projects.

The decision to pursue a fuel tax increase follows a series of meetings last fall. Officials led by St. Germain and Senate Transportation Committee Chairman Robert Adley, R-Benton, met to study viable options to raise new revenue to help the state address a $12 billion backlog to pay for needed road and bridge work.

Among the options recommended by the Transportation Funding Task Force include public-private partnerships, indexing the state’s fuel tax rate to inflation, and raising the fuel tax rate. Other options discussed included decreasing diversions from fuel tax collections.

The panel found that about 20 percent of the nearly $600 million the state’s fuel tax raised two years ago was diverted for other uses such as the Louisiana State Police, ports and airports.

St. Germain’s bill, HB712, awaits consideration in the House Ways and Means Committee.

A separate bill from St. Germain would raise the fuel tax rate between one dime and a quarter for the next decade. HB777 would determine the amount of tax collected on the average price of fuel during the previous six-month period.

The tax rate would be set at 45 cents when the average monthly price is below $3 per gallon, 35 cents when the average is between $3.01 and $4 per gallon, and 30 cents when the average is above $4 per gallon.

Another option offered by St. Germain calls for adding a 1-cent sales tax for 10 years to benefit 15 listed road and bridge projects.

HB778 would apply the first $100 million raised to the state Transportation Infrastructure Bank. Additional revenue would be sent to a newly created major economic development corridors fund.

The projects identified in the bill include upgrading U.S. 90 to interstate standards from Interstate 10 in Lafayette to Broussard, adding a new bridge over the Mississippi River connecting state Highway 1 to state Highway 30, and turning I-20 into a six-lane highway from state Highway 546 to state Highway 594.

Other proposals at the statehouse also include fuel tax rate increases. Rep. Walt Leger, D-New Orleans, introduced a bill to raise the fuel tax rate by 4 cents for three years.

Another bill introduced by Rep. Joel Robideaux, R-Lafayette, would permit parishes to levy an excise tax on fuel. Revenue would be dedicated exclusively for construction and maintenance of roads and bridges.

The bills from St. Germain; Leger, HB388; and Robideaux, HB639, await consideration in the House Ways and Means Committee.

Copyright © OOIDA