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Wyo. House advances proposed fuel tax hike

Ben Neary, Associated Press

CHEYENNE, Wyo. (AP) -- A proposal to raise Wyoming fuel taxes by a dime a gallon cleared its first hearing in the state House of Representatives on Wednesday.

Supporters said the state highway system and local governments need a steady source of road funding. They emphasized out-of-state drivers will pick up just over half of the $70 million a year additional cost.

But tax opponents suggested the state road agency should tighten its belt. They said it's the wrong time to impose more taxes on the backs of working families.

Rep. Mike Madden, R-Buffalo, the chairman of the House Revenue Committee, urged House members to approve the bill. He said the state hasn't hiked the fuel tax since 1998, when it went from 9 cents to the current 14 cents a gallon on gasoline. And he said Wyoming's tax rate lags behind the rate in surrounding states.

"The fuel tax is the only tax I've ever seen around here that enjoys widespread support," Madden said, adding that commercial operators who log many miles realize they save money over the long term by having the state's roads in top condition.

"Adequately addressing roads is critical to a thriving economy," Madden said. "And Wyoming, perhaps more than any other state, thrives on roads"

Wyoming has put over $700 million in state general funds into the Wyoming Department of Transportation in recent years to supplement its budget, Madden said. But with the Legislature now considering trimming state agency budgets across the board in the face of stagnant energy revenues, he said the state can no longer afford to chip in money that could fund other programs.

Gov. Matt Mead pushed the tax increase in his state of the state address last week.

Drivers from other states buy 53 percent of the fuel that's sold in Wyoming, Madden said. He said that means 53 percent of the general fund money Wyoming has put into its own road system essentially has been a gift to those out-of-state drivers.

Madden said it would cost Wyoming more than $134 million a year to maintain the state's roadways in their current condition.

A range of groups are supporting the tax increase proposal, including the Wyoming Taxpayers Association and the Wyoming Contractors Association. They generally say the state needs a steady source of funding to pay for highway upkeep.

Erin Taylor, executive director of the Taxpayers Association, said after the House vote her group supports the tax increase because it is a pure user fee. When it's possibly to impose such a fee to pay for public infrastructure, she said, "we think we should fully utilize our ability to do that before we look to other things like general funds."

The Wyoming Farm Bureau Federation and the Wyoming arm of the National Federation of Independent Businesses, however, have spoken out against the proposal, generally saying their members don't want to see any increase in prices at the pump.

Rep. Allen Jaggi, R-Lyman, spoke against the tax increase. "Wyoming families have a set income they have to live within, and I'm asking why can't some state agencies do the same," he said, adding that a down economy is not the time to increase taxes.

"I sent out a survey when I was running in my county," said Jaggi, who was re-elected last year. "And it came back nearly 100 percent: They want less government and less taxes."

When the bill came to a vote, 34 of 60 House members rose in favor of it. It needs to pass in the House two more times before it would head to the Senate.