Idaho transportation deal raises fuel tax, vehicle fee

By Keith Goble, Land Line state legislative editor | 4/29/2015

Gov. Butch Otter signed into law a transportation funding deal that will boost revenue in the state of Idaho by $95 million annually.

In a transmittal letter to House Speaker Scott Bedke, the governor wrote that the bill “is a respectable start on a multi-year effort to provide for the long-term needs of our transportation infrastructure.”

State lawmakers spent much of the three-month session that wrapped up this month trying to reach consensus on a plan to help the state address a $262 million annual shortfall for road work.

House and Senate legislators worked into the wee hours of the session’s last working day ironing out the details for a plan to pay for road and bridge work throughout the state.

“It represents compromise, concession, and a realization that – in the face of apparent intransigence – something indeed is better than nothing,” Otter wrote.

Previously H312, the new law includes a 7-cent-per-gallon fuel tax increase to 32 cents. The increase is estimated to raise $63 million annually.

The state’s fuel tax rate now is set at 25 cents per gallon. The rate has remained unchanged since 1996.

A separate provision increases vehicle registration fees by $25 for large trucks. Owners of 80,000-pound trucks driven more than 50,000 miles will pay $3,485 – up from $3,460.

Owners of personal vehicles will pay $21 more per year. The additional revenue from all vehicle fees is estimated at $31 million per year.

The state’s highway fund will collect 60 percent of the new revenue each year from vehicle fee and fuel tax increases. Local governments will divvy up the other 40 percent.

In addition, a portion of any budget surpluses in the next two years would be routed to transportation.

Otter has opposed the “surplus eliminator” provision but he acknowledges that he understands the need to tap available revenue for roads and bridges.

“No, I am not excited about the surplus eliminator idea. It has the feeling of a slippery slope despite the two-year sunset.

“There is no pot of gold hidden at the end of this legislation. But H312 does provide tangible evidence that the Legislature now appreciates the importance of safe and reliable highways and bridges for our economy and the wellbeing of our citizens.”

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