CHEYENNE — A proposal to raise state fuel taxes by a dime a gallon cleared its final vote in the state Senate on Thursday. It now heads to Gov. Matt Mead, who has said he favors a tax hike.
The Senate passed the bill by a vote of 18-12. The measure would raise the tax from the existing rate of 14 cents a gallon up to 24 cents for gasoline and diesel.
The tax hike would raise about $70 million a year, of which roughly two-thirds would go to the Wyoming Department of Transportation and one-third to local governments.
A coalition including contractors and the Wyoming Taxpayers Association has lobbied for the bill, saying the Transportation Department needs a steady source of state funding to allow it to plan projects more efficiently.
But Thursday’s vote came over the objections of a few senators who said working people can’t afford a tax hike. They suggested the transportation agency could meet its obligations without more revenue if it operated more efficiently.
Sen. Charles Scott, R-Casper, said he heard heavy opposition to the prospect of raising the fuel tax when he went door-to-door in his re-election campaign last fall. He said many people believe the Department of Transportation is inefficient.
“They were saying, ‘We just can’t afford any more taxes. We do not want more taxes,”’ Scott said. “That’s perfectly reasonable. That’s why this is a representative democracy, so that we can reflect the views of the people on the government taking their money involuntarily for taxes.”
Sen. Curt Meier, R-LaGrange, said raising the tax would increase the cost on everything that’s delivered over roadways in the state.
“Federal taxes are going up. There’s no doubt about that,” Meier said. “Wages are stagnant. People are losing their purchasing power. The price of gas is going up with or without taxes.”
Sen. Michael Von Flatern, R-Gillette, is chairman of the Senate Transportation, Highways and Military Affairs Committee. He said in a floor debate earlier this week that the state has appropriated about $700 million from its general fund to the state Transportation Department over the last nine years, but that the year-to-year approach has left the agency with no certainty of what future funding will be.
Mead pushed the fuel tax increase in his state of the state address last month. He said Wyoming essentially has subsidized out-of-state motorists by keeping its tax rate lower than surrounding states.
Sen. Phil Nicholas, R-Laramie, spoke Thursday in favor of the tax hike.
“We all have constituents who frankly believe that they should pay no taxes — that the mining industry, oil and gas, and coal should pay for everything,” he said.
Nicholas said the regional nature of the gasoline market means that by having lower fuel taxes than its neighboring states, Wyoming has subsidized lower prices in other states. He said the state hasn’t seen its lower tax rate reflected in lower pump prices at Wyoming filling stations.
Jonathan Downing, with the Wyoming Contractors Association, said increasing the fuel tax was the natural way for the state to maintain its transportation system.
“Our members are closest to this issue as they perform a lot of construction, and we’ve seen numerous occasions over the years where we’ve had to stretch the dollars,” Downing said.
Tony Gagliardi, Wyoming state director for the National Federation of Independent Business, had opposed the tax increase. He said his group has more than 2,000 members in the state and intends to ask Mead to veto the bill.
“We represent the true job creators in our economy,” Gagliardi said.
“We did speak out against it. We think it’s a bad time to be raising the fuel tax,” Gagliardi said. He said the government needs to break its current habit of seeking to raise taxes the minute it sees revenues slipping.