Wyoming panel rejects fuel sales tax idea

| 8/18/2010

Despite a heads up from the head of the Wyoming Department of Transportation about the long-term deterioration of roads without substantial increases in revenue, a special legislative panel opted against a proposal to charge sales tax on fuel purchases. Other options will be considered this fall.

The Joint Transportation, Highways and Military Affairs Interim Committee met recently to vote on two draft bills that could be considered during the 2011 regular session. Faced with flat federal funding and increased costs, lawmakers appear to be open to various options.

But a proposed 4 percent sales tax on gas and diesel at the point of wholesale distribution was rejected on a 7-6 vote. Sought by Sen. Michael Von Flatern, R-Gillettee, an anticipated $56 million annually in sales tax revenue would have been used solely for roads.

Local governments would have had the option to raise the tax by up to 2 percent, which WYDOT estimated could add up to another $28 million a year if all counties followed suit.

The committee opted to delay until its October meeting consideration of a proposed dime increase to the state’s tax on gas and diesel.

The panel is in the process of working through various funding methods to help pay for transportation work. One option for funding work on roadways such as Interstate 80 includes increasing the state’s tax on diesel and gas by a dime. Sen. Gerald Geis, R-Worland, is calling for the 14 cent-per-gallon tax to rise to 24 cents.

Advocates say a penny increase would be expected to generate about $6.8 million.

Geis’ effort is similar to a plan endorsed by the panel nearly a year ago. Last fall, lawmakers opted to pursue increasing the tax rate over the course of two years. During a meeting this spring, lawmakers decided against the two-year phase-in.

Out-of-state drivers appear to be the target of the proposed tax increase. WYDOT officials say that 53 percent of revenue collected from the fuel tax is paid by nonresidents.

However, critics say there isn’t enough will for the state to increase taxes. Another funding scenario that could get attention in the months to come is adding tolls along I-80.

The Owner-Operator Independent Drivers Association is opposed to efforts to pursue tolls on existing highways built with tax dollars. The Association believes that states must come up with ways to fund highway expansion without putting an additional burden on truckers and on others already paying their fair share in taxes.

WYDOT officials say something must be done because Wyoming doesn’t have enough state or federal money to maintain the interstate. They say the situation will only get worse with traffic projected to double in 30 years. Trucks account for about half of the traffic.

To view other legislative activities of interest for Wyoming, click here.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the topic included in this story. Comments may be sent to statelegislativedesk@ooida.com.