Otter still pushing for gas-tax increase

BOISE – Idaho Gov. Butch Otter says new tax figures are further evidence that the state’s economy is doing better, and support his position that it can support a gas-tax increase to help pay for roads.

The Republican governor – who has been trying to persuade the House of Representatives to pass such an increase – told a news conference Friday that some early state income tax figures from April appear not as bad as previously feared.

Wayne Hammon, Otter’s budget chief, didn’t provide exact April figures, saying to do so would be premature.

Hammon conceded the figures used by his boss were “preliminary” and “incomplete,” but insisted they provide a snapshot of an economy that’s no longer in free fall.

“Our rate of decline has stabilized,” he said.

Withholdings that reflect current income levels of state residents appear to be about $10 million shy of expectations, as opposed to the $50 million some were predicting a short time ago. The decline in April sales tax revenue appears only about half as bad as some feared, Otter said.

But House leaders immediately responded that the new numbers weren’t sufficient to change their minds.

House Assistant Majority Leader Scott Bedke, R-Oakley, said state tax revenue forecasts were lowered three times earlier during the current fiscal year, most recently in March. If the April figures are even worse, Bedke said, that’s even less justification for boosting the gas tax.

“We all agree we have not hit bottom,” he told the Associated Press. “That seems to buttress the House’s position that a recession is not a good time to raise taxes.”

Despite Bedke’s reaction, Otter is optimistic the House, when it returns next week, will “receive this news on the economy with the same appreciation and hope that I have,” he told reporters.

The latest plan he’s pushing would raise the gasoline tax by 3 cents a gallon on July 1, 2011, from 25 cents now, followed by another 3-cent increase on July 1, 2012. He’s also agreed to an interim committee, as the House has suggested, to meet over the summer and look at other ways to pay for fixing Idaho’s roads.

Otter has been at loggerheads with his fellow Republicans in the House all session over boosting the gas tax to provide more money for road repair.

Six times this year, representatives have rejected proposals by Otter to raise the gas tax anywhere from 2 cents to 7 cents per gallon. The last vote, on a two-year, 6-cent hike, failed 55-15. After deciding they could do no more, the House passed 45 bills on Wednesday and adjourned. Since the Idaho Constitution doesn’t allow one chamber to adjourn for more than three days without the other’s consent, the House must return on Monday.

As of Friday, the session had lasted 112 days, closing in on the state record set by 2003’s 118-day marathon.

“If we can get the interim committee and the 3-plus-3 delayed implementation, I think Monday night we can be saying ‘goodbye,’ ” Otter said on when the session might end.

Otter’s latest tax proposal would raise about $52.8 million after 2013. The House already has approved a Division of Motor Vehicles increase for drivers’ licenses and other fees, and repeal of a tax exemption on ethanol. Altogether, Otter said, that could raise nearly $80 million.