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How do you pass a tax hike in an election year? Target out-of-state visitors, not voters.

(Steve Griffin | The Salt Lake Tribune) UTA's new long "BRT" (bus rapid transit) is parked in front of the Capitol during Transit Day on Capitol Hill in Salt Lake City Friday February 2, 2018.

This is an election year, so raising taxes on Utah voters could be tricky for legislators, most of whom are up for re-election. But a possible political solution is tucked into a massive transportation bill: Instead of charging local voters more, it piles taxes on out-of-state visitors instead.

How?

SB136 would double the tax on rental cars and raise a tax on hotel rooms by more than nine-fold to help fund mass transit and highways. It does propose some tax hikes for Utahns, but delays most of them beyond this election year.

The bill was formally introduced Friday by Sen. Wayne Harper, R-Taylorsville, and includes recommendations from a legislative task force created he headed to look at how to fund transportation as gasoline tax revenues shrink, and how to restore public trust in the Utah Transit Authority.

Most attention on the bill has focused on how it would reorganize the scandal-scarred UTA — including replacing its current part-time, 16-member board with a full-time, three-member commission to more closely watchdog the agency’s executives.

But it has a raft of proposals on how to raise transportation taxes, too.

Leaders say that is needed because gasoline taxes now generate less and less revenue — in part because electric and hybrid vehicles pay no or few such taxes, and even gas-powered vehicles now get better mileage so they also pay less.

So among proposals is to double the current car rental tax from 2.5 percent to 5 percent.

Also, the bill proposes raising a tax on hotel rooms — which has been used up to now to improve outdoor recreation facilities in the state — from 0.32 percent to 3 percent, nearly a tenfold hike, with the increase going to transportation.

“Rental cars drive on the roads, so it’s a user fee” to help fund highways, Harper said. He also justifies the proposed room tax increase by saying that people who use hotels “also use road to get to them. It’s a user fee.”

Rick Egan | The Salt Lake Tribune Senator Wayne Harper talks about internet sales tax, in the Senate at the Utah State Capitol, Tuesday, March 1, 2016.

While the bill takes on the big job of reorganizing UTA, Harper said he’s had few concerns raised about that — but he has long lines of people wanting to talk about taxes in the bill, acknowledging it’s hard to raise taxes in an election year.

“That’s the only thing they want to talk about — how do we fund” transportation, he said. “I’ve been meeting all day with stakeholders, and I’ll continue to do it over the weekend as well.”

He adds, “There is and will continue to be extensive dialogue about how we fund transportation and transit in the future, and how we get more money.”

The bill as introduced on Friday backs off — though just slightly — from some controversial increases it had proposed in an earlier version.

Electric and hybrid vehicles now pay $44 a year like gasoline- and diesel-powered vehicles. The bill would raise it to $194 for electric vehicles, and to $65 for hybrids, instead of the $200 and $75, respectively, that was first pitched.

Harper said the proposed increase is to force owners of electric cars and hybrids to pay essentially the same amount the owner of a similarly sized gasoline vehicle would pay in gas tax.

Clean air groups and car dealers criticized those provisions in meetings of the legislative task force, arguing it could ruin incentives for motorists to purchase those more-expensive vehicles that help reduce pollution. They said only 1 percent of vehicles now on the road are electric.

The bill could also impose some other large taxes on Utahns — but not immediately in this election year.

If counties did not charge the maximum-possible 1.05 percent sales tax (a penny per dollar) for transportation allowed by state law, the state will automaticly impose it by 2022. Salt Lake County, for example, now charges only 0.69 percent.

In 2015, voters in Salt Lake and Utah counties rejected Proposition 1 to hike such taxes — in part because of distrust of UTA over high executive salaries, extensive international travel and sweetheart deals with developers.

Senate President Wayne Niederhauser is among those who support mandating that tax, saying the money is essential to keep up with transportation needs created by rapid population growth.

The new bill would also give county councils or commissions the option of imposing such taxes without voter approval, as had been required previously.

TRACK THIS BILL

A massive transportation bill that would reorganize the Utah Transit Authority and add a variety to taxes to help fund roads and transit in the future. - Read full text

Current Status:

Filed Law Introduced in Senate Senate Committee Senate passage House Committee House passage Governor's OK