Utah lawmakers discuss fuel tax increase

By Keith Goble, Land Line state legislative editor | 6/17/2014

A group of Utah state lawmakers are spending time this summer discussing how to raise new revenue for transportation work.

In the lead-up to the 2015 regular session, the Transportation Interim Committee chaired by Rep. Johnny Anderson, R-Taylorsville, is taking time to study funding for current and future transportation needs. Among the funding options drawing consideration are the state’s fuel tax, the sales tax and vehicle registration fee adjustments.

The 24.5-cent-per-gallon tax rate hasn’t changed since 1997. Supporters say that something needs to be done to help the state compensate for more fuel efficient vehicles and inflation that has hurt the state’s ability to stretch revenue.

“We’re at a critical tipping point,” said Anderson.

Multiple bills introduced during the 2014 regular session would increase the state’s fuel tax rate but none mustered enough support to move to the governor’s desk.

The special panel has continued the fuel tax discussion. One proposal would increase the fuel tax rate by 1.5 cents annually through 2018. At that time, the tax would increase 7.5 cents to 32.5 cents per gallon.

Rep. Jim Nielson, R-Bountiful, told the group that they would not be having this conversation if the fuel tax rate was linked to inflation. Instead, he pointed out the tax has lost purchasing power since the last time the Legislature took action on the rate.

However, he said, it’s not a dead tax yet.

“If we would simply work with the rate or change it to something based on inflation the system would work quite well,” Nielson testified.

The legislative push to address transportation funding follows a year’s worth of study by state lawmakers about how to make up for a projected $11.3 billion shortfall during the next 25 years for road, bridge and transit work.

The group is slated to continue to meet through November. They will then present the Legislature with possible solutions to address unfunded needs in transportation infrastructure.

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