Utah gas tax increase urged in 2015

Thursday , December 11, 2014 - 4:20 PM

OGDEN — While Ogden City officials want the Legislature to fix what they call an outdated transportation funding model, a local lawmaker and a few others say that despite living in a state where raising taxes is often a hard sell, the city may get its wish.

Rep. Gage Froerer, R-Huntsville, spoke at Ogden’s city council meeting earlier this week and told the council to expect some change to the state’s fuel tax in 2015.

Froerer said a number of issues, like the recent trend of falling gas prices, more fuel efficient vehicles, aging road infrastructure and an increased cost in building and maintaining roads, are making the state’s gas tax structure less and less effective each year.

”What we’re seeing, with the high efficiency vehicles, is more miles driven with less revenue being generated by the gas tax,“ he said. ”So, like it or not, this year I would look for some type of modification to the gas tax and maybe some type of modification to how transportation funds are allocated.“

In late November, Ogden joined the Utah Transportation Coalition, which along with the Utah League of Cities and Towns, has been spearheading a measure to find a replacement for the current transportation funding system. 

The city supports a transportation funding option that would allow for the statewide implementation of a quarter cent local option sales tax that would be used for transportation. The “local option” tag means individual cities would be able to chose whether or not to apply the tax, which would be added to all sales transactions within the city.

”(The ineffective gas tax) is especially an issue for Ogden city, with the age of our infrastructure,” Froerer said. “This impacts your ability to maintain your roads.”

Last week, the Legislature’s Interim Transportation Committee discussed the gas tax in a special meeting in Uintah County.

Lincoln Shurtz, director of Government Affairs for the Utah Association of Counties, told members of the committee that last year, Utah cities and counties collected $124 million in gas taxes, but spent $220 million to maintain their roads.

“There is a net difference of about $100 million between what we collect in gas tax and vehicle registration fees and what we’re actually spending on maintenance and operation of our system,” Shurtz said. 

Shurtz said about 45 percent of a typical Utah city or county’s total road funding is subsidized by money from their general funds, with the remainder coming from the gas tax and vehicle registration fees.

“We’re aggregating, (so) there may be some communities where that number fluctuates off of that 55-45 split, but that’s a pretty good average if you were to look at most municipalities and most counties,” he said.

Shurtz said Ogden suffers more than most cities.

“In Ogden’s case in particular, their current maintenance budget covers about 10 percent of the identified maintenance on just pavement preservation,” he said. “That does not include any new capacity (or) any additional maintenance obligations associated with sidewalks, curb and gutter or other obligations. It’s a significant issue.”

Utahns currently pay a tax of about 25 cents for each gallon of gas they purchase. Shurtz said the last gas tax increase was a 5-cent up tick in 1997. He said during that same time, “there has been a 300 percent increase in the cost of building roads.”

“Our citizens are requiring more of us,” Shurtz said. “Not only do they want a piece of pavement, but they want meandering sidewalks, they want bike trails, they want pedestrian separated trails, they want additional safety devices — all of the sorts of things you are starting to see as part our transportation infrastructure is now very different than it was in the 1950s and other times when we were seriously relying on the gas tax.” 

Nationally, a report this week by the American Association of State Highway and Transportation Officials and the American Public Transit Association says that in order to meet surface-transportation needs, $163 billion of investment is required annually for the next six years.

The World Economic Forum ranked the quality of U.S. roads 16th worldwide this year, down from eighth five years earlier.

States can increase gasoline taxes, seek other revenue or simply neglect their needs, said Richard Auxier, a research associate at the Tax Policy Center in Washington.

“Option C is untenable,” he said. “The problem is that this is always going to be a difficult political vote.”

In states dominated by Republicans, who have made opposition to taxes a pillar of political identity, the sell could be hard, but Republican elected officials, who generally oppose higher taxes, are seeing the link between spending on infrastructure and improving the economy, said Sean Slone of the Council of State Governments.

There has been “a realization among Republicans in the last few years how dire the situation has gotten in some states as far as the condition of the infrastructure, but also how important it is to invest,” he said.

Members of the Utah transportation committee say they are looking at several options to cover the funding shortfall, including a flat hike of the gas tax, raising the gas tax each year based on inflation, increasing vehicle registration fees with an emphasis on hybrid and higher-mileage cars and different iterations of the quarter-cent sales tax.

“We can’t in my opinion continue to kick that ball down the road without making some hard decisions,” Froerer said.

Contact reporter Mitch Shaw at 801-625-4233 or mishaw@standard.net. Follow him on Twitter at @mitchshaw23.

Bloomberg News contributed to this report.

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