A South Dakota legislative committee has said “no” to a proposal to boost taxes and fees to raise $140 million for state and local roads and bridges.

The Senate Transportation Committee voted unanimously to kill a bill that targeted more transportation funds by raising fuel taxes over two years, increasing vehicle registration fees and increasing the excise tax on vehicles.

Sen. Mike Vehle, R-Mitchell, requested that his bill be rejected. He cited lawmakers’ unwillingness to endorse such a measure during an economic downturn.

The initiative was led by nearly a dozen lawmakers from both parties, who were members of a special interim panel that studied highway money last summer. The group decided to pursue the legislation – SB1 – during this year’s session.

With the state in need of more than $240 million a year for road funding, the lawmakers looked at multiple options to help bridge the gap.

Among the provisions included in the bill was an increase in the state’s 22-cent-per-gallon fuel tax. The interim panel had endorsed pursuing a 10 cent-per-gallon increase, but Vehle trimmed that to 6 cents late last month. Half of the increase would have been imposed May 1 of this year and the other half in 2012.

Other provisions called for increasing the average license fee by $18 and the excise tax on vehicles sales by 1 percent.

Boosting the current fuel tax rate to 28 cents per gallon, raising the excise tax and increasing license fees would have generated $54 million annually for the state’s transportation system. Local governments would have received a $30 million-per-year shot in the arm from the license fees.

While there has been some bipartisan support for the tax and fee increases, passage was expected to be a difficult task. A two-thirds majority of lawmakers would need to endorse the effort to approve it. Backing such hikes during an election year was certain to be an intimidating task for lawmakers.

Before the vote, Rep. Larry Lucas, D-Mission, tackled that concern. He encouraged Senate committee members to look beyond the November elections and do what is best for transportation in the state.

“We need to look at this for what’s good for the state and avoid holding it up because of an election down the road,” Lucas said.

Critics of the fuel-tax increase said the price at the pump already is too high. Others are concerned that charging more to license vehicles is too big a blow to consumers.

Sen. Gordon Howie, R-Rapid City, told lawmakers the people of South Dakota want nothing to do with a large tax increase. He encouraged lawmakers and departments in the state to pursue savings and priorities instead of calling on taxpayers to bail them out of jams.

Advocates for the tax increases said the state is in a no-win situation that lawmakers are trying to figure out how to get out of. Like it or not, something must be done soon or roads are going to continue to deteriorate. They said that waiting will only make the funding problem worse.

“Sooner or later this body is going to have to pass a tax increase on highway funding,” Sen. Art Fryslie, R-Willow Lake, told lawmakers. “The longer we wait the more it’s going to cost us.”

To view other legislative activities of interest for South Dakota in 2010, click here.

– By Keith Goble, state legislative editor

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