Fuel tax increase advances in Texas

| 3/23/2005

A Texas House panel has unanimously approved a measure that would have drivers digging a little deeper into their pockets to fill up their tanks.

The House Ways and Means Committee voted on March 17 to tie the state’s fuel tax to the rate of inflation. The bill – HB5 – now moves to the full House, where it is expected to gain approval.

“I support the indexing,” House Speaker Tom Craddick recently told local media. Without it, he said, the state can’t keep up “with the inflationary problems we have with the dollars we’re raising through the (fuel) tax.”

The Texas tax current rate for gasoline and diesel is 20 cents a gallon. It hasn’t changed since 1991.

That hasn’t kept up with the rate of inflation, and left the state with a loss of real dollars from the budget used for building roads statewide, said Rep. Mike Krusee, R-Round Rock.

Krusee, the bill’s sponsor and chairman of the House Transportation Committee, told the Austin American-Statesman the state lacks 40 percent of what it needs for highways and other projects.

He said linking the fuel tax to the Consumer Price Index would mean as much as $50 million dollars more per year in revenue.

That would amount to about a half-cent-a-gallon increase annually, bringing the state fuel tax up to 20.5 cents a gallon in fiscal 2006.

Three-fourths of revenue from the fuel tax goes to the state highway fund and one-fourth to public schools.

Krusee told the newspaper the tax hike isn’t intended to solve the state’s backlog of highway projects.

“All it does is keep us running in place. But if we don’t do this, the shortfall will increase every year,” he said.

Lt. Gov. David Dewhurst, who presides over the Texas Senate, said the idea of generating more money from the fuel tax is worth discussing.

“We’ve got continuing challenges to put more money into our highways,” Dewhurst said. “We’ll take a look at it over here in the Senate.”