Idaho Senate approves gas tax increase

BOISE – Idaho senators passed a phased-in 10-cent increase in the gas tax Tuesday as part of a road funding plan that’s significantly higher than what the House approved earlier this week.

Idaho senators took the $20 million road-funding bill from the House and turned it into a phased-in, $127 million plan.

The House bill would have raised registration fees on cars and trucks by $15 apiece next year, plus imposed new fees on electric and hybrid cars. The amended version from the Senate boosts the registration fee increase to $25, slightly lowers the hybrid fee, and tacks on a 10-cent increase in the gas tax to be phased in over the next four years.

On Tuesday evening, the Senate approved the amended bill on a 22-13 vote, sending it back to the House.

Senate Transportation Chairman Bert Brackett, R-Rogerson, noted that the state faces a $262 million annual shortfall for maintenance of its roads and bridges. “It’s been a long time arriving at this point, and I think this is a good compromise,” he told the Senate. “Some think this is maybe too high, some think it is too low, but it is a good down payment on our shortfall.”

It’s not clear how the House will view the amended bill; it earlier passed legislation for a 7-cent gas tax increase, but that was coupled with a cut in top income tax rates and elimination of the sales tax on groceries. The Senate killed that bill by unanimous consent, without a debate or vote. The rift between the House and Senate has extended Idaho’s legislative session well past its March 27 target for wrapping up the year.

The phased gas-tax increase would start with a 4-cent boost on July 1, taking Idaho’s 25-cent-per-gallon fuel tax up to 29 cents. That would be followed by a bump to 33 cents a gallon July 1, 2017, and another bump to 35 cents a gallon July 1, 2019. 

Next year, the bill would raise an additional $65.7 million for road work; by the end of the phase-in in 2019, it would raise $126.6 million a year.

Sen. Steve Vick, R-Dalton Gardens, spoke out against the measure.

“This is a very large tax increase,” he said. “In my opinion, to come in, in the best revenue year since I’ve been here, to take all of that money and allocate it and raise taxes on top of that, I don’t think is frugal or conservative.”

Brackett said failing to fund road maintenance is “a form of deficit spending,” adding it’s not conservative.

Senate Democrats tried to get the just-amended bill sent back to the Senate Transportation Committee for a public hearing, but their move failed on a 7-27, straight party-line vote.

“We had very strong opinions about having had a public process on the Senate side, which we haven’t had a chance to have,” said Senate Minority Leader Michelle Stennett, D-Ketchum.

But Brackett said the issue has been discussed for years.

“This issue did not just come up,” he said.

Minority Democrats also opposed the new fees on electric and hybrid cars, which would charge a $140 annual fee for electric cars and $75 for hybrids.

“The surcharge on electrics and hybrids will disincentivize their use,” argued Sen. Grant Burgoyne, D-Boise. “We need more of them, not less.”

Burgoyne said there aren’t enough of those vehicles in Idaho yet to impact roads; fees on them could be considered later, he said.

Sen. Shawn Keough, R-Sandpoint, countered that those drivers with vehicles that use less gas aren’t paying in a “commensurate way.”

“I think in the tradition of Idaho’s user-pay system, if it’s got wheels and runs on the road, it needs to pay the fee,” Keough said.

That’s because Idaho largely funds its roads with gas taxes, though that source has fallen woefully short in recent years. Idaho hasn’t raised its 25-cent-per-gallon gas tax since 1996.