DALLAS - On the final day of their 2015 session, Utah lawmakers approved a compromise plan to raise fuel taxes for the first time in 18 years.
A substitute version of House Bill 362 cleared both chambers as the session neared its close at midnight March 12. The bill combines provisions of the original HB 362 sponsored by Rep. Johnny Anderson, R-Taylorsville, and Senate Bill 160 by Sen. Kevin Van Tassell, R-Vernal.
The 24.5 cents-per-gallon gas tax would rise 5 cents a gallon on Jan. 1, 2016. The Senate earlier sought a 10-cent increase, while the House initially wanted no hike.
The compromise converts the current cents-per-gallon gas tax into a system similar to a 12% tax on the wholesale price of gasoline adjusted once per year. However, the sales tax formula does not take effect until the wholesale price of gasoline reaches a rolling average of $2.45 per gallon. The tax is capped at 40 cents per gallon under the formula.
Anderson told the House that the state's fiscal analysts estimate that any increase under the formula could be six to 10 years away.
"This bill represents a significant shift in policy for the state of Utah," Anderson said. "For the past 17 years we have relied more and more on the general fund for our transportation needs because of this flawed user fee. This is a generational shift for us."
Rep. David Lifferth, R-Eagle Mountain, said he could justify the tax increase to his constituents who are among the longest commuters in the state.
"This has been a heavy lift," Lifferth said. "We have been working on this for the past two years. This was a tough and hard-earned negotiation."
Rep. Rich Cunningham, R-South Jordan, said he was uneasy with the funding formula based on the volatility of oil in the past six months.
"We've seen oil fluctuate some $65 per barrel and I don't have the confidence that it won't go back up," he said.
The Senate agreed to a House provision allowing counties to ask voters to approve a quarter-cent per dollar sales tax increase to provide more money for local projects.
In urban areas, cities and the Utah Transit Authority would each receive 0.1-cent of the sales tax increase, and counties would receive .05-cent.
Proposed increases in car registration fees were opposed in the House and removed in the Senate.
The Senate approved the compromise 20-8, and the House approved it 44-29.
The gas tax increase was backed by a coalition of construction and engineering firms and local governments and chambers of commerce called the Utah Transportation Coalition. Gov. Gary Herbert has indicated support for the fuel tax increase to provide more transportation funding in the growing state.
