Fuel Tax Hikes Looming in 4 States

One cash-strapped state has passed a measure to increase its fuel tax, and at least three others are considering similar laws to aid their highway funding woes.

The Maine Legislature approved a 3-cent fuel tax increase and a $2 vehicle registration fee hike on June 5 (6-14, p. 31).

Gov. Angus King signed the measure, which will raise the fuel tax on Aug. 1 and the registration fees on Oct. 1.

Kentucky, Oregon and Virginia are considering raising pump prices — one of the most significant expenses for trucking companies.

“I’m certainly not in favor of that,” said Mike Tweedie, executive vice president of Sargent Trucking in Newport, Maine. “We have enough taxes — more than enough to go around.”

Truckers in Kentucky might support the fuel tax increases being hinted at by Gov. Paul Patton, said Harold G. Bernard, president of the Kentucky Motor Transport Association. But that depends on a reduction or repeal of the state’s weight-distance tax, he said.

Transportation Cabinet officials in Kentucky say an influx of cash is needed, because the six-year road construction plan passed by the legislature in 1998 is $670 million short.

The legislature, which does not convene until January, has held preliminary meetings on the subject, but so far lawmakers have been skeptical of the need to raise taxes.

“No compelling need has been demonstrated as of yet,” said Rep. Harry Moberly, chairman of the House Appropriations and Revenue Committee. “But I believe it’s still something that we ought to continue to consider in the context of comprehensive reform.”

Publicly, Patton has maintained neutrality, but he has suggested that a fuel tax increase could be offset by a reduction in the state’s property tax on vehicles.

“The property tax could help some, but not that much due to the apportioned vehicle property tax we pay,” said Bernard. “I don’t think the Kentucky trucking industry could support any increase in fuel taxes or any other road fund taxes without some changes in the weight-distance tax.”

Truckers in Oregon are trying to push the same idea, but a plan to replace the state’s weight-distance tax with a diesel fuel levy was cut down in the House. Senate lawmakers have vowed to put the repeal effort back on track and are expected to act soon on a measure (6-7, p. 4).

Early rumblings of a fuel tax increase have also surfaced in Virginia.

A bipartisan commission studying the state’s future transportation needs, which was established by the legislature in 1997, suggested June 1 that a nickel-a-gallon rise might be needed to overcome the state’s $40 billion road-funding shortfall.

The Commission on the Future of Transportation in Virginia will conduct eight public meetings across the state before making recommendations to the General Assembly in January.

“The General Assembly has to be prepared to pull the trigger,” said Del. William P. Robinson Jr., who chairs the commission. “The gas tax is a fair user fee.”

ov. Jim Gilmore, who established a committee to study transportation needs in May, has said tax increases will be considered.

Kansas and South Dakota raised their fuel taxes earlier this year, and North Dakota made permanent a temporary tax enacted in 1997.