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Proposal to shift gas tax rejected

Published February 22, 2014 4:48 pm

Hurt the poor? • Would have lowered gas tax but raised sales tax to raise funds for roads.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Amid arguments that it would "pave under the poor," a House committee rejected a proposal Friday that would have lowered the state gasoline tax in exchange for higher sales tax to raise more funds overall for transportation.

HB135 failed on a 3-5 vote in the House Transportation Committee.

"We are asking people to pay with their food tax for those who use the roads whether or not they have automobiles," said Steve Erickson, representing the Crossroads Urban Center, which operates a food pantry for the poor.

"This bill is another attempt to pave under the poor," said Linda Hilton, director of the Coalition of Religious Communities, which advocates for the poor. "Just go ahead and raise the gas tax. Please don't lower it and put it on the backs of the poor."

But committee chairman Johnny Anderson, R-Taylorsville, sponsor of the bill said everybody benefits from transportation whether they have a car or not. He said the bill would solve some of the problems with the current gas tax, which has not been raised since 1997.

He said that tax has lost 40 percent of its buying power since then from inflation and because of more fuel-efficient cars.

Studies estimate an $11.3 billion shortfall through 2040 for high-priority transportation projects if the tax structure is not changed. Supporters of the bill estimated it could make up roughly $1.5 billion of that shortfall.

Anderson's bill would cut the current gasoline tax from 24.5 cents to 12.2 cents. It would replace lost revenue for transportation by hiking the state's share of general sales tax from 4.7 percent to 4.96 percent, and from 1.75 percent to 2.01 percent on food.

The new sales tax for transportation would tend to raise more revenue automatically with inflation. Meanwhile, the bill would have required the remaining gas tax to be adjusted each year to match the rate of rising road-maintenance costs.

But committee members said they were uncomfortable shifting what has been a user fee to a more general tax.

Rep. Val Peterson, R-Orem, said, "I am concerned about it moving away from a use tax…. We need to continue to find a good solution for that."

Meanwhile, another gasoline tax hike is advancing, and has been approved by a Senate committee. SB60 by Sen. John Valentine, R-Orem, would recalculate the gas tax annually. It is written to stay the same for the first year, but then would increase with the price of gasoline — but not fall below current levels.