Study looks at gas tax alternatives

BOISE – The U.S. Highway 95 of the future should have multiple lanes all the way from Grangeville north to the Canadian border, state transportation officials say, but that plan could be threatened if the use of alternative fuels, hybrids and high-gas mileage vehicles gathers steam.

Idaho funds its state share of highway improvements almost entirely from the state’s gas tax. And the new trends, while making vehicles more efficient, mean less gas tax gets paid.

“If the fleet changed overnight and vehicles started getting 50 miles a gallon average, we would have a funding crisis, and that would jeopardize our projects,” said Chuck Winder, chairman of the Idaho Transportation Board. “I don’t think it’s that far away.”

That’s why the Idaho Transportation Department is launching a 15-month study of investment in transportation statewide.

A 40-member task force of business, industry and government policy leaders will take public input at seven hearings around the state on just what Idahoans want from their transportation system in the future, and how they want to pay for it. Possibilities include new ways of taxing alternative-fuel vehicles, such as by weight or miles traveled, and increased focus on public transit.

The group, whose North Idaho members include Benewah County Commissioner Jack Buell, lumber company owner Marc Brinkmeyer, Nez Perce County Commissioner J.R. Van Tassel and St. Maries nursing home operator Scott Burpee, will come up with recommendations to the transportation board, the governor and the Legislature.

Idaho’s backlog of needed road improvements runs into the billions, state officials say.

“The solutions will be state and local,” said Thomas Warne, the former Utah transportation director who is a consultant to the new task force, dubbed the Forum on Transportation Investment. “There will be private-public partnerships that will come out of this.”

But neither Warne nor Winder was specific about what approach the 40-member panel might recommend for expanding the revenue base beyond the 25-cent-a-gallon fuel tax and registration and licensing fees.

“As fuel efficiency becomes higher, we lose money,” Winder said. “But as we look to the future, we’ve got to figure out how to deal with that.”

Winder said other states have looked into taxing vehicles based on weight as an indicator of the wear they impose on roadways. Another option some have explored is installing global positioning systems on all vehicles so they could be taxed by actual miles driven – although “that may be too Big Brother-ish for a conservative state.”

State highway revenues were estimated at about $300 million for the current budget year, and two-thirds of that goes to the state system. The rest is shared with local governments.

That’s a 50 percent increase in the past decade, much of it from a 4-cent-a-gallon rise in the gas tax rate and higher vehicle registration fees imposed in 1996. But the number of miles driven in Idaho jumped 60 percent in the same period.

Better fuel efficiency, intensified by the advent of hybrid vehicles, has combined with the skyrocketing cost of gasoline to restrict the projects the state can undertake each year either to improve safety or meet traffic demand. Although support from the federal government rose significantly in 2001, it has been level since.

Winder said Idaho’s love affair with gas-guzzling pickup trucks and sport utility vehicles helps offset some of the impact, but the continued revenue erosion is moving the state highway system toward a crisis.

Hwy. 95 is a key example, he said. Major, multimillion-dollar projects have improved sections of the route, but improvements still are needed. “We have a vision for multiple lanes on 95 from Grangeville north. We want to improve the system for safety reasons and for efficiency reasons,” he said.

But if Idaho’s revenue for road projects falls, it’ll be a struggle just to keep up with maintaining existing roads, let alone adding capacity, Winder said.

“We are going to have to have a totally different approach in the future,” he said.

The department put together a task force that traveled the state in 2003, taking the public’s pulse on what it expects from Idaho’s road system and how it will pay for it. But it avoided any financing recommendations, focusing on an evaluation method that funnels limited cash to the most effective projects.

Winder flatly rejected any plan to divert general tax revenue to highway construction, and he steered clear of suggesting an increase in the gasoline tax would be the new panel’s eventual recommendation. That recommendation is expected in time for legislative consideration during the 2006 election-year session.

But early this year, the Idaho chapter of the American Automobile Association financed an independent statewide poll that found 63 percent support for a penny increase in the fuel tax. The majority disappeared when the proposed increase went up to two or three cents.

A penny generates about $9 million split between state and local road needs.

The poll also found better than 2-to-1 opposition to using any of the fuel tax or registration fees to underwrite public transportation.

“People aren’t demanding it yet,” Winder said. “They still like driving their own vehicles. We need to change that.”