This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
In 2000, the Utah Department of Transportation and local road departments received $314 million in fuel tax revenues to build and maintain roads. Ten years later, the fuel tax revenues amounted to $337 million, a $23 million increase, or about 6 percent over a full decade.
That increase sorely lagged behind the natural inflationary costs of labor and building materials needed to maintain the roads, not to mention the several hundred thousand more users of the highways.
That's because the fuel tax system, a major component of highway funding, ensures the revenues remain stagnant while the cost of everything else inflates.
Sen. Stuart Adams, R-Layton, highlighted the problem during an interview with his Senate colleague Howard Stephenson, R-Draper, on K-TALK's Red Meat Radio Program last week.
The state fuel tax is 24 cents per gallon. So a 10-gallon fill-up generates the same amount of tax revenue whether the price-per-gallon of gas is a $1 or $4.
That's unlike most consumer products in which the sales tax is based on the cost of the purchase, not on the volume of the purchase. So the tax revenue rises with inflation.
That's why Adams sponsored and the Legislature passed SB229 during the general legislative session this year and it's why lawmakers likely will override Gov. Gary Herbert's veto of the bill when it meets in a special override session on Friday.
Adams' bill would dedicate 30 percent of the growth in sales tax — an estimated $60 million beginning next year — toward road projects. Herbert has said that would result in $1 of every $4 collected by the state being earmarked for road projects, potentially starving other state needs.
The Legislature needs flexibility in its funding decisions every year, Herbert argues.
But what about changing the fuel tax system and base the tax on the price paid at the pump rather than on the number of gallons purchased?
"The governor doesn't want to have that conversation," said a spokesperson for Herbert. That's because it would be a tax increase and this is not a good political climate to be using the "T" word.
Sen. Kevin Van Tassell, R-Vernal, actually sponsored a bill this year to raise the fuel tax by 5 cents per gallon, then raise it a half-cent every two years for the following six years to allow for inflation.
But that bill suffered a relatively quick death in the Senate.
Nobody wants to be associated with any kind of tax increase. But both Adams and Van Tassell pointed out a healthy road and highway system is essential to move goods and services and maintain economic development in the state.
Adams pointed out that 45 percent of the roads in Utah are no longer being maintained, other than patching potholes, because of the lack of funding.
Sen. Curt Bramble, R-Provo, is in frequent contact with legislators from other states because of his work on national organizations like the National Conference of State Legislatures and the American Legislative Exchange Council. He says there is an ongoing discussion about changing the fuel tax system to account for inflation, "but it's never caught hold." He said there has been resistance from convenience-store retailers who would have to convert to a more complicated system of calculating taxes.
Stephenson, president of the Utah Taxpayers Association, says his association has opposed a price-based fuel tax. But he says the association also believes in putting a greater burden of the cost of services on the users of the program. So a price-based fuel tax could be open for discussion.
prolly@sltrib. —