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Lawmakers increase gas tax, allow local increases for transportation

Utahns will pay more at the pump as a result of a gas tax increase passed in the final hour of the 2015 Legislature after lengthy negotiations between the House and the Senate.
Utahns will pay more at the pump as a result of a gas tax increase passed in the final hour of the 2015 Legislature after lengthy negotiations between the House and the Senate.
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SALT LAKE CITY — Utahns will pay more at the pump as a result of a gas tax increase passed in the final hour of the 2015 Legislature after lengthy negotiations between the House and the Senate.

Even House Speaker Greg Hughes, R-Draper, who started the 45-day session confident lawmakers would find a way to provide more money for transportation needs, was hesitant the last night of the session to predict the increase would pass.

"This isn't a just a simple, 'Let’s draw a bigger number at the bottom of the spreadsheet,'" Hughes said. "It's a very comprehensive initiative. If we are able to do that, if we have the political will to do that, I think it's one of these very, very heavy lifts."

He said even though the legislation would be seen as a landmark in planning for population growth, the vote count was too close to call among the majority House Republicans, who have grumbled about raising taxes in a year of surpluses.

But shortly before the session ended at midnight Thursday, the House voted 44-29 to give final approval to changes made in a bill that initially only created a new formula that wouldn't have raised taxes on fuel sales until prices rose.

Now, HB362 imposes a 12 percent sales tax on gas starting July 1 that will increase the current 24.5 cents-per-gallon tax, unchanged since 1997, by 5 cents. The tax is capped at 40 cents a gallon and does not allow it to drop below 29 cents.

The bill also allows local governments to go to voters for a 0.25-cent sales tax increase for transportation projects. But it does not raise registration fees on alternative fuel vehicles, an amendment sought by the Senate.

Rep. Johnny Anderson, R-Taylorsville, said the final version accomplished the goal set by House leaders to fix the formula. Hughes has called the per-gallon tax, which unlike the new formula does not increase collections as prices rise, a "dinosaur."

The Senate wanted to just raise the gas tax. After the House defeated a separate bill raising vehicle registration fees by $10 — and up to seven times that for those that run on alternative fuels — there was an attempt to put an increase in the House bill.

The Utah Transportation Coalition, which includes local governments and the Salt Lake Chamber, pushed for the House bill as a way to boost the buying power of the gas tax over time.

The current gas tax, last increased nearly two decades ago, has not kept pace with inflation. The coalition estimated it has lost 40 percent of its buying power, making the 24.5 cent tax worth less than 15 cents today.

The local option tax would be split among the Utah Transit Authority and other mass transit entities as well as local governments to be used for public transportation, road maintenance and bike facilities.

“Transit is essential to alleviating congestion, cleaning our air and facilitating economic development,” said H. David Burton, chairman of the UTA board of trustees.

Burton said the bill gives voters a “choice to invest in transit, which will result in an immediate increase in overall transit service and connectivity, including more service on the weekend and earlier and later service.”

The president of the Utah League of Cities and Towns, Provo Mayor John Curtis, said local governments "support a comprehensive approach to our transportation system, and we’re grateful to the Legislature for coming together to pass it.”

For the Utah Department of Transportation, the increase means more money for taking care of the state's roads and bridges. While there are revenues earmarked for easing congestion, maintenance funds have lagged.

"We haven't had enough money to fund our lower-volume roads," UDOT Executive Director Carlos Braceras said. "You're going to see better condition pavements and bridges throughout the state."

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