Wyoming Fuel Taxes Will Rise 10¢ on July 1
This story appears in the Feb. 25 print edition of Transport Topics.
Wyoming has agreed to increase its tax on diesel and gasoline by 10 cents, to 24 cents a gallon as of July 1, a change that was supported by the state’s trucking industry.
Gov. Matt Mead (R) on Feb. 15 signed the bill to increase the fuel levy, a day after the Senate voted to approve the measure. The House approved it in January.
The Wyoming Trucking Association supported the tax increase but did not take the position “lightly,” said managing director Sheila Foertsch.
“Wyoming’s current fuel tax is one of the lowest in the nation,” she said. “That fact played heavily in our discussion about supporting a fuel tax increase.”
Even with the 10-cent increase, Wyoming’s diesel tax still will be competitive regionally, she said. “We will still be just at or below every surrounding state’s fuel tax levels except Colorado’s.”
Colorado’s diesel tax is 20.5 cents a gallon. Diesel taxes in the five other states bordering Wyoming range from 24 cents a gallon in South Dakota to 28.5 cents in Montana.
“We also recognized a valid need for a continued stable funding source for [the Wyoming Department of Transportation,]” Foertsch said. “Wyoming has a good highway system, and we felt it was extremely important that it continue to be adequately funded.”
Renny MacKay, the governor’s press secretary, said, “The issue is the Department of Transportation has said that to maintain our current roads at the current condition, it needs another $134 million a year.”
The increase in the tax is expected to generate $70 million more in revenue annually. Under the bill, about two-thirds of that is dedicated to WYDOT needs and the rest to local governments for roads and bridges.
The tax increase, even with the additional revenue it will generate, will not allow the state or any locality to build new highway projects, MacKay said.
“This is about trying to maintain the current condition of roads,” he said.
Mead is one of the few governors who has agreed to a large increase in a state’s fuel taxes. Wisconsin Gov. Scott Walker (R), for example, recently rejected the recommendation of a blue-ribbon commission he appointed that the state add 5 cents to its 32.9-cent diesel and gasoline tax.
Since Mead came into office two years ago, he has been searching for a way to raise money for road and bridge maintenance, MacKay said.
“Highways are vital to our economy,” MacKay added. “Something like $25 billion a year worth of trade moves in and out of Wyoming on our roads,” he said. “This is a big, wide-open state, and it’s also a safety issue. It’s how our kids get to school every day.”
The governor tried two years ago to persuade lawmakers to use some of the money that flows into a state mining severance fund for transportation, MacKay said, but the legislators rejected any changes in the structure of the fund.
Under state law, mining companies in the state pay extraction fees into the fund, but its principal — which has now grown to $6 billion — may not be tapped for any purpose, MacKay said.
The state can spend only the interest from the fund, which varies from year to year, depending on the economy, he said, and that money pays for a host of state services.
