New Hampshire, Kentucky advance fuel tax increases; Utah effort falls short

By Keith Goble, Land Line state legislative editor | Friday, March 14, 2014

State lawmakers in New Hampshire and Kentucky voted on Thursday, March 13, to advance bills that would increase fuel tax rates. A similar effort in Utah, however, was killed.

The New Hampshire Senate voted 14-9 to send a bill to the House that would increase the state’s 18-cent-per-gallon fuel tax rate for the first time since 1991. Specifically, SB367 would increase the tax by four cents to 22 cents per gallon starting in July.

Sen. Jim Rausch, R-Derry, has acknowledged that the estimated $32 million annually that would be generated from the tax increase wouldn’t plug the state’s transportation funding gap.

“It’s a small finger in a big hole,” he said during a recent committee hearing.

The bill was later amended by the Senate Ways and Means Committee to remove a provision that sought to tie future tax increases to the rate of inflation.

Bob Sculley, president of the New Hampshire Motor Transport Association, told the Senate panel last month that indexing the tax to inflation “is not desirable at all by the group that I run.”

Instead, Sculley encouraged lawmakers to better prioritize existing revenues.

At the time, Rausch wasn’t happy about the opposition to his bill. He said if the bill isn’t signed into law he will pursue a repeal of laws that benefit the trucking industry, such as the heavy truck allowance.

“We’ll bring the weight down to 80,000 pounds and we will at least save the road for grandma and grandpa so they don’t hit the pothole from the truck that broke the pavement.”

If approved by the House, the bill would move to Gov. Maggie Hassan’s desk. She has said she would sign it into law.

In Kentucky, House lawmakers narrowly approved a bill that would raise the state’s fuel tax rate back to 32.3 cents per gallon. On a 53-44 vote, the chamber voted to send HB445 to the Senate for further consideration.

Thanks to partially tying the state’s tax rates to the average wholesale price of fuel, changes in the excise tax for gas and diesel are automatic. In January, the tax was reduced from 32.3 cents per gallon for gas to 30.8 cents. The 29.3-cent rate for diesel dipped to 27.8 cents.

Sponsored by Rep. Rick Rand, D-Bedford, the bill would also set the 32.3-cent rate as the floor for the tax.

Gov. Steve Beshear supports the change, which would pay for about $60 million in road work, in his proposed two-year maintenance and construction plan.

Advocates also say that it’s technically not an increase if they are setting the rate back at where it was three months ago.

Republican Floor Leader Jeff Hoover of Jamestown said that passage of the tax increase is reneging on a promise made to constituents five years ago.

“In 2009, when we last voted to establish a new floor for the gas tax, we made a commitment to the people of this commonwealth that as the price of gas fell, the tax would fall as well,” Hoover said in prepared remarks. “This measure is not in keeping faith with the pledge we made at that time.”

The Utah Legislature adjourned for the year on Thursday with a bill to tweak how the state collects fuel tax one vote short of heading to the governor. The state’s 24.5-cent-per-gallon fuel tax hasn’t changed since 1997.

House Speaker Becky Lockhart, R-Provo, didn’t allow representatives to discuss the bill, effectively killing it for the year. The Senate previously approved SB60 on a 26-1 vote.

The bill called for trimming the state’s tax rate by 10.5 cents per gallon to about 14 cents. In return, a sales tax portion would have been implemented that could increase over time.

A provision was included in the bill to prevent the tax from dipping below the current rate in the future.

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