Wyoming House sends fuel tax hike to Senate

CHEYENNE, Wyo. (AP) -- The Wyoming House of Representatives took the rare step Friday of approving a bill that would increase the state fuel tax by a dime a gallon, rejecting arguments it would hurt some working families.

The House voted 35-to-24 to approve the bill that would raise the fuel tax from its existing rate of 14 cents a gallon up to 24 cents. The hike would raise about $70 million a year for the state highway system and local roads.

Gov. Matt Mead had called on lawmakers to approve the tax increase in his state of the state address earlier this month, saying Wyoming needs a dependable source of highway funding. With state energy revenues predicted to remain flat for years to come, state government can no longer afford to subsidize the department with general funds that could be used for other programs, the Republican said.

Supporters in the House beat back strong opposition from opponents who argued that Wyoming's working families, particularly people on fixed incomes, can't afford to pay more in taxes.

Rep. Mike Madden, R-Buffalo, chairman of the House Revenue Committee, urged House members to approve the bill.

Madden has repeatedly emphasized at hearings on the bill this week that out-of-state drivers buy 53 percent of the fuel sold in the state, and will therefore pick up the bulk of any increase in the price at the pump. The state hasn't raised the fuel tax since 1998, he said.

Madden also said Friday that Wyoming residents won't see a 10-cent jump in prices when the tax increase is imposed. Rather, the gasoline market essentially sets prices on a regional basis, lumping Wyoming together with other states that impose higher taxes, he said.

"The fuel tax is not a big mover, it's not a big factor, and it's not a big determinant of what you pay at the pump," Madden said.

The gasoline market essentially averages out taxes among states in the region, Madden said. Pump prices are determined more by the refined price of fuel, which is mainly determined by the price of crude oil, he said.

Rep. Ruth Ann Petroff, R-Jackson, agreed that the realities of how the gasoline market allocates taxes mean that Wyoming drivers are paying more to cover higher tax rates in neighboring states. "We are already paying this tax," she said. "The question is, are we going to collect it?"

Rep. David Miller, R-Riverton, argued against the tax, arguing a move up to 24 cents a gallon would be a 70-percent increase.

"We have to be careful here, because this is going to impact everyone in Wyoming," Miller said. "It's actually a very regressive tax and it will impact the people who need the money the most."

Rep. Allen Jaggi, R-Lyman, said he didn't disagree that state highways need to be maintained. However, he said he's concerned about the efficiency of the Wyoming Department of Transportation and whether the agency truly needs more money.