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Utah on Verge of Hiking Gas Tax by 21 Percent
The Utah State Legislature's 2015 General Session ended on March 12 with an historic settlement between the two branches to "address (the) projected $11.3 billion shortfall for key road projects through 2040," writes Lee Davidson of The Salt Lake City Tribune. "Gov. Gary Herbert has supported the approach taken by the compromise, indicating he would likely sign it." Herbert was quoted in a post last month on governors resorting to increasing gas taxes out of necessity to maintain transportation infrastructure:
"Nobody wants to raise a tax," [Republican] Utah Gov. Gary Herbert said on C-SPAN last month. "My gosh, that's the worst thing you can do as a politician. But the practical realities are, we've got to do something."
After "raising the gas tax by about 5 cents a gallon on Jan. 1, 2016," writes Davidson, it would convert it to a wholesale fuel sales tax.
The compromise adopts a House proposal to convert the current [24.5 (PDF)] cents-per-gallon gas tax into a system similar to a sales tax. That allows the tax collected at the pump to increase automatically when gas prices rise.
The Senate had hoped to raise the gas tax by 10-cents [S.B. 160]. The House was against any gas tax hike.
The deal would impose a 12 percent tax on the wholesale price of gasoline, adjusted once a year.
Those adjustments are conditional upon the "the wholesale price of gasoline reaches $2.45 a gallon, which is not projected to happen for six to 10 years," according to Rep. Johnny Anderson, R-Taylorsville.
While the tax hike is of great significance to meeting the state's infrastructure needs, the five cent increase will likely put the Beehive State just below the current state average of 30-cents per gallon when it takes effect next year.
"The deal has a cap to ensure the gas tax does not rise above 40 cents a gallon over time," notes Davidson.
Public opinion NOT on their side
As we noted in January, recent polling showed that only 30-35 percent of Utahs residents supported increasing the gas tax, but that does not appear to have deterred supporters. The photo on top of Davidson's piece shows a rally to support the gas tax legislation. One member in in the crowd holds a sign, "Fix the $11.3 billion pothole".
Raising gas taxes to fund infrastructure is non-partisan
If Gov. Herbert signs the five-cent gas tax hike bill, he will be the second Republican governor to have signed gas tax increase legislation this month. Iowa Gov. Terry Branstad signed a 10-cent increase on March 1.
Hat tip to AASHTO Journal.