Gov. Spencer Cox avoided taking a stance Thursday on a push to overhaul Utah’s gas tax that has proved flammable — prompting Idaho leaders to threaten to cut off Utah’s water — but said he is confident that cooler heads will prevail and a mutually beneficial solution can be reached.
House Speaker Mike Schultz, R-Hooper, wants the state to begin taxing fuel exported from Utah’s refineries to surrounding states, which generated a furious response from Idaho leaders who said it could cost Gem State drivers as much as $250 million a year.
A bill to implement the change has yet to be released, though Schultz has promised for more than a week it was imminent. Cox said he has been in close communication with Idaho leaders, and is “optimistic that we will land … in a place where we can all be friends and do what’s good for the people of Utah and good for the people of Idaho and the western United States.”
Cox said his goal is to find a solution that can benefit everyone by lowering the price of gasoline “here and everywhere else” by boosting the supply.
“We’re working very closely with the speaker and the president [of the Senate] … to figure out if there’s a better way to do that,” the Republican governor said at a Thursday news conference. “We haven’t seen a bill yet, but I’m hopeful we end up in a better place.”
Utah is home to five oil refineries that produce 220,000 barrels of fuel a day, according to data from the U.S. Department of Energy. When Beehive State motorists fill up, they pay a gas tax at the pump of 37.9 cents a gallon. But 75,000 barrels of gas that gets shipped to neighboring states is exempt from Utah taxes.
Schultz is pushing to change that and begin taxing those exports and, in the process, reduce the gas levy that Utahns pay.
That infuriated lawmakers in Idaho, which imports a significant share of its gas from Utah. If drivers there are stuck paying Idaho’s existing gas tax plus a new Utah assessment, it could cost mightily.
A recent resolution introduced by Idaho House Speaker Mike Moyle, a Republican, warned that if Utah follows through on its export tax, it would “result in hundreds of millions of dollars in annual costs borne by Idaho families, farmers and businesses.”
Moyle said in an interview with Idaho News 6 that he hoped Utah would back off but added that “there’s some things we can do to put pressure on Utah, right?”
“I mean, one of the things I would like to see us do is we’ve got a lot of water that goes to the Great Salt Lake,” he said. “ …. Let’s keep it. Let’s keep it in Idaho.”
The main waterway that flows from Idaho to the Great Salt Lake is the Bear River. Schultz owns a ranch in the Bear River Basin, but said he doesn’t feel the threat was directed at him.
“It was directed at the state of Utah as a whole. I think it’s sad,” Schultz said in a recent news conference. “Threatening to kill the Great Salt Lake does not end well for Idaho.”
The blame for the tension, according to Utah House Majority Leader Casey Snider, R-Paradise, is the petroleum industry, which he said has tried to spread misinformation and feed dissension between the two states.
Schultz said that is what happens “when you have some of the largest corporations in the world trying to protect what they have.”
In a statement last month, before the friction erupted with Idaho, the Utah Petroleum Association said it does not oppose the change to Utah’s tax structure but cautioned there are risks. States like Idaho could ditch Utah for imports from Colorado and Montana, meaning less tax revenue for Utah.
It could also be tied up in costly litigation, since the U.S. Constitution limits states’ power to regulate interstate commerce.
Schultz confirmed in an interview Wednesday evening that stakeholders had met earlier that afternoon and talks are ongoing. He said, once again, that a bill could be made public by week’s end.