Tag archive

transportation funding

Zwonitzer: Time for Legislature to study gas tax increase

in News/Transportation/Taxes
2138

It is time for the state to study a possible increase in gasoline taxes, according to the co-chairman of the Legislature’s Revenue Committee.

Rep. Dan Zwonitzer, R-Cheyenne, said the proposed 3-cent per gallon tax increase approved by the Revenue Committee in July should definitely be reviewed by the Legislature when it meets in 2020.

“The last actual tax that the Legislature has increased, the only tax in my 15 years, has been the gas tax,” he said. “And it’s probably time again.”

The 3-cent increase would boost Wyoming’s total tax on gasoline to 27 cents per gallon and raise an additional $20 million per year. Under the proposal forwarded to the Legislature by the Revenue Committee, $13.5 million of that would go to the state Department of Transportation to build and maintain roads, while $6.5 million would be split between city and county governments.

Zwonitzer said the increase, which would leave Wyoming’s total gas taxes among the lowest in the region, would help offset some of the Department of Transportation’s deferred maintenance costs.

“But with hundreds of millions of dollars in deferred maintenance needed, the 3 cents is really just kind of a chip in the bucket,” he said.

The state last increased gasoline taxes in 2014, adding 10 cents to the price of a gallon of gasoline.

Cassie Craven, of the Wyoming Liberty Group, said she wondered what the money raised by the last increase had been used for.

“I’m wondering where that money went,” he said. “We heard back then we wouldn’t feel it at the pumps and gas prices don’t seem to indicate that. So where did the money go?”

The Wyoming Taxpayers Association, Wyoming Truckers Association and Petroleum Marketers Association have all said their members would support the increase as long as the extra tax is not tied to inflation.

The Wyoming Farm Bureau is on record as opposing the tax because of the expenses it would add to farming operations.

Fuel taxes pale in light of future electric travel

in News/Transportation
Gas Tax
2137

By Ike Fredregill, Cowboy State Daily

Fuel taxes alone can’t keep pace with the cost of highway maintenance in a future with electric vehicles and fuel-efficient engines, Sen. Stephan Pappas, R-Cheyenne, said. 

“The problem with the current fuel tax is it’s not sustainable,” Pappas said. “We’re changing our habits in the U.S. We’ve got new urban models, telecommuting, people are staying home, and many people don’t even own cars.”

While most of these challenges are hitting metropolitan areas the heaviest, Pappas said Wyoming can’t rely on rural insulation forever. 

“We may be working more remotely in the future than we currently do,” he explained. “Also, there’s a growing number of hybrid vehicles, and a number of purely electric vehicles as well.”

Fuel taxes could be in the spotlight during the 2020 Legislative Session as legislators scramble to close the growing funding gap in Wyoming Department of Transportation’s road maintenance budget.

A member of the Wyoming Legislature’s Transportation, Highway and Military Affairs Joint Committee, Pappas recently voted against an Interstate 80 toll road proposal, because he said he’s not sure a toll road could close the gap by itself.

“There’s a bunch of ways to skin a cat,” he said. “I don’t think there is a singular option that can fix the state’s highway situation. I think the answer will be multi-faceted.”

To that end, Pappas is drafting a bill to create a task force which will look at several revenue options for highway construction and maintenance. The bill draft is slated for presentation to his committee in October.  

Tax at the rack

Describing the state’s fuel tax as complex is somewhat of an understatement, said Wayne Hassinger, the WYDOT Fuel Tax Administration program manager. 

“There are no straight lines when it comes to fuel tax,” Hassinger explained. “When we hire a new employee, they go through 12-18 months of training to administer the fuel tax.”

Wyoming charges distributors, suppliers and importers fuel tax at the rack, the physical location fuel exits the terminal or refinery.

“A terminal is a location where multiple suppliers store their fuel,” said Kim Peters, the WYDOT Fuel Tax Program supervisor.

From the rack, fuel is loaded into semi-trucks and rail cars before being shipping to locations such as gas stations and bulk storage facilities.

“We impose the tax when it crosses the rack, but it’s a tax on the ultimate user,” Hassinger explained. “When you buy gas, you pay the tax, but it’s already been paid up the line. So somebody in that line is getting reimbursed when you pay it at the pump.”

In 2013, Wyoming raised both the gas and diesel tax from 14 cents to 24 cents a gallon, Hassinger said. Prior to that, the state had not raised the fuel tax since the late ’90s, he added.

While all gas and diesel is taxed at the rack, the point at which the end user refunds the supplier determines how the money is distributed throughout the state.

When the suppliers submit their tax returns, they identify where the taxed fuel was destined.

“There’s a (tax) distribution model for gas and a different distribution model for diesel,” Hassinger said.

If the fuel is gas and destined for a city, the city will get 15 percent of the tax collected. For diesel, cities’ collect 5 percent of tax collected within city limits.

If the fuel is sold outside city limits, the county receives a portion of the tax collected. Counties receive about 13 percent of taxes collected on gas and 20 percent of diesel taxes.

The remaining tax collected is earmarked for several accounts, with the primary being WYDOT’s highway fund, which is used for highway construction and maintenance, Hassinger explained. WYDOT can only spend fuel tax monies on road construction and maintenance, but he said counties and cities are permitted to use the revenue as they see fit.

The highway fund receives about 57 percent of tax collected for gas sales and 75 percent of diesel tax.

During fiscal year 2018, Wyoming collected about $83.3 million for gas taxes and about $84.5 million for diesel taxes. In late calendar year 2018, WYDOT reported to the Legislature about $135 million in unfunded operating expenses, including more than $72 million in construction and maintenance.

User fees

As the future of travel evolves, Pappas said the state’s methods of funding infrastructure need to keep pace. 

“America is really falling in love with the electric vehicle,” he said. “Experts predict 55 percent of all new car sales in the U.S. will electric by 2040.”

Hassinger said Wyoming was in the first wave of states to charge electric vehicles a use tax, which recently increased from $50 to $200 annually. But Pappas said the increase wouldn’t close the funding gap.

“If we were California, (electric vehicle user fees) might work out, but we’re not California,” he said.

The fee only applies to electric vehicles registered in Wyoming, so the state captures no additional revenue from electric vehicles registered in other states and traveling on Wyoming highways.

“You could charge Wyoming (electric vehicle) users thousands and thousands — it’s not going cover the cost of maintaining the roads,” Pappas explained.

The federal government also taxes fuel, but Hassinger said it hasn’t raised taxes in 30 years and Wyoming receives the lowest federal reimbursement allowable. 

“Fuel taxes are a user fee — when you pay fuel tax, you’re paying to use the road,” Hassinger said. “Every state is struggling with this: How to fund rising infrastructure costs with diminishing revenues. The national consensus is it’s likely going to be a mix of all sorts of things.”

Federal bill would help Wyoming’s highway maintenance

in News/Transportation
1779

Proposed federal legislation could bring millions of federal dollars to Wyoming to help the state maintain its highways.

The Fixing American Surface Transportation Act — called the FAST Act — is a $287 billion highway transportation package that just cleared a U.S. Senate committee by a vote of 21-0. The bill calls for a 27 percent increase in funding for the nation’s highways over the next five years.

Wyoming now receives about $285 million in federal money per year to maintain its highways. The FAST Act would increase that funding by 2 percent in the bill’s first year and by 1 percent each year for the following four.

Maj. Gen. Luke Reiner, director of the Wyoming Department of Transportation, said the extra cash would be a benefit for Wyoming, given shortfalls it sees now in highway funds.

“We’re about $135 million short in unfunded needs per year …” he said. “So certainly the 2 percent, 1 percent you talk about would add $15 million or $20 million. That would certainly go toward our focus on maintaining our infrastructure.

The act would also streamline some regulations the department must now comply with, Reiner said, such as required traffic congestion studies.

“It’s in the federal rule that says we need to count the cars … somewhere between Casper and Cody at 10 o’clock on a Tuesday morning,” he said. “We don’t think that’s a good use of our time. We do not have a congestion issue like other states and communities.”

Wyoming already pays three times the national average per person to maintain its roads, Reiner said, due in part to its low population and also to the amount of traffic on interstate highways coming from other states.

“It’s a national road and we certainly pay to maintain it,” he said. “The federal money we get goes directly to that.”

Wyoming’s Legislature this year approved a 3 cent boost in gasoline taxes that is expected to raise about $13 million a year for highway work.

Go to Top