Will Other States Follow Wyoming's Lead In Raising Gas Tax?

Wyoming has gone where few states have gone recently - defied conventional wisdom that the 'gas tax is dead' and shown that it is very much alive with the Senate increasing the state excise tax by 71% (10-cents). Gov. Matt Mead is expected to sign.

If Gov. Matt Mead signs the tax increase bill which earlier passed the Assembly and cleared the Senate on Feb. 14 on a "18-12 roll-call vote after a lively third debate", the state excise tax on gasoline will increase from 14 cents to 24 cents effective July 1.  Joan Barron writes that "Mead has said he favors a tax hike as a means to create a steady revenue stream for highway and road repairs and construction."

Only Alaska has a lower state gas tax as shown by the Tax Foundation's Weekly Map: State Gasoline Tax Rates.  In fact, the Tax Foundation highlighted the state's low tax in a brief paper accompanied by a graph of its tax rate from 1923 to 2010 in nominal and 2012 cents.  

While most of the anticipated $71 million in new revenue for the 2014 fiscal year would go to state highways and county and city roads, state parks will also be the recipients of $1.2 million.  It will cost families about $112 annually.

A major issue in the debate was who should pay for road upkeep - trucks vs. cars, industry vs residents? 

The Wyoming Taxpayers Association, a major tax hike advocate, had been accused of having "been heavily lobbied for by a number of "commercial interests" during the debate on Feb. 14.  Other tax supporters included the Wyoming Association of Municipalities and the Wyoming Association of County Commissioners.

Sen. Charles Scott, R-Casper "said the real problem is the trucking industry has not been paying its fair share since the repeal of the per-ton-mile tax.  "I don't think we should raise the tax on people until we raise the tax on the industry that is causing the problem," he said.

Casper went on to blast the Wyoming Dept. of Transportation's " traffic circles as "inventions of the devil."  In reality, they are roundabouts - WYDOT has sought to educate drivers on how to use them on their website.

Senate Republican Majority Floor Leader Phil Nicholas "said the regional nature of the gasoline market means that by having lower fuel taxes than its neighboring states, Wyoming has subsidized lower prices in the other states. He said the state hasn't seen its lower tax rate reflected in lower pump prices at Wyoming filling stations."

"We all have constituents who frankly believe that they should pay no taxes -- that the mining industry, oil and gas, and coal should pay for everything," Nicholas said.

Another state to keep an eye on is Vermont where "lawmakers are considering increasing the statewide education property tax by 5 cents and creating a new sales tax on gasoline" according to WCAX-TV. 

Full Story: Wyoming Legislature approves state fuel tax hike



Irvin Dawid's picture

Mead signs - Feb. 15

AP reports "Gov. Mead Signs Fuel Tax Increase Into Law". He stated, "... the state can no longer afford to subsidize the transportation department from general funds." $70 million annually is expected to be raised and put toward transportation, 2/3 to state; 1/3 to local governments.

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