ATR Opposes Transportation Tax Hikes in Idaho
Yesterday, the Idaho state Senate amended a transportation plan to include new gas and car tax hikes to be phased in over the next four years. Intended to fund transportation projects, the $126.6 million tax hike cleared the Senate 22 to 13 and heads to the House for approval. Without a re-appropriation of funds from other parts of the budget, the state faces a $262 million shortfall for maintenance of its roads and bridges.
The House recently passed a 7-cent gas tax hike, which was coupled with a cut in the top income tax rates and the elimination of the sales tax on groceries. The Senate killed that bill without a debate or vote.
Idaho’s gas tax stands at 25 cents per gallon and when combined with the federal 18.4 cents per gallon of gas taxes, Idaho consumers pay 43.4 cents per gallon of gas in taxes. The Senate amendment would raise the Idaho gas tax to 35 cents per gallon for a total of 53.4 cents per gallon total paid in taxes by Idaho commuters. That's higher than consumers pay in neighboring Montana, Wyoming, Nevada, Utah, and Oregon.
The plan would raise the gas tax 4 cents this year, 4 cents in 2017, and another 2 cents in 2019.
Idaho Sen. Steve Vick (R-Dalton Gardens) opposed the tax increase, noting, "This is a very large tax increase…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.”
The original House bill contained $20 million in new revenue. The Senate’s tax hike is 8.5 times larger than the House transportation package, which relied on registration fee increases of $15 on cars and trucks and $6 on motorcycles.
Another legislator who opposed the bill, Sen. Grant Burgoyne (D-Boise) noted the rushed nature of the proposal. “If we pass this, my constituents will never be heard on it…I didn't think that’s the way we did business.”
Idaho Gov. Butch Otter and other lawmakers have refused to prioritize transportation projects with revenue from the general fund. This is misguided, as Sen. Steve Vick recently pointed out. From IdahoReporter.com:
Vick said lawmakers should have found money in general fund spending hikes, at least $200 million in this year, to ease the burden of the gas tax and fee increases.
“To the citizens, it all comes out of the same pocket for them,” Vick said. “They have to budget for it. To those people, this is all the same money.”
Instead of focusing on ways to extract more revenue from taxpayers, commuters and small businesses in Idaho, the legislature should fund transportation with currently collected revenue, regardless of which fund it comes from. There isn’t a rule against using general fund money for transportation; it’s illogical to pretend that there is. General fund revenue should be spent on the legislature's greatest priorities, which should include maintaining state roads and bridges.
The Idaho House should reject this tax hike and demand tax relief instead.