Delaware lawmakers consider two fuel tax increase proposals

By Keith Goble, Land Line state legislative editor | Thursday, June 20, 2013

Delaware state lawmakers continue to consider possible funding mechanisms to pay for needed road and bridge work. Options getting attention as the regular session winds down include fuel tax and vehicle fee increases.

Gov. Jack Markell has proposed a 5-cent increase in the state’s fuel taxes. Currently, Delaware charges 23 cents a gallon for gas and 22 cents for diesel.

The nickel increase is estimated to raise $25 million annually in new revenue for transportation work.

Another revenue-boosting option would double the amount sought by the governor. Sen. Robert Marshall, D-Wilmington West, introduced a bill that would increase the tax rates by 10 cents per gallon.

Marshall’s plan would earmark revenue for the Delaware Works Trust Fund. The new fund would distribute revenue equally four ways.

The state Department of Transportation would claim 25 percent of the revenue generated from the dime increase to the fuel tax rates. The rest of the revenue would be directed to tourism, education and local public work projects.

Marshall’s bill – SB132 – is in the Senate Finance Committee.

Other revenue-generating ideas offered by the governor include increasing motor vehicle documentation, titling and registration fees. He also proposed a 50-cent increase in weekend tolls on state Route 1 at the Dover and Biddles toll plazas. Increasing rates from $2 to $2.50 is estimated to raise nearly $4 million a year.

A plan to raise vehicle document fees is estimated to raise $27 million annually.

All funding mechanisms proposed have an uphill climb to win legislative support before the session is scheduled to wrap up on June 30. Lawmakers from both legislative chambers have expressed concerns about pursuing tax or fee increases.

Concerns mentioned include whether it is appropriate now to dip into taxpayers’ pockets for more money. Instead, some lawmakers say they would prefer to see the state better manage revenue already available to the state.

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

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