House Committee Recommends Restructuring Gas Tax

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Vermont’s Transportation Fund has a major financial problem because, over the past 7 years, the annual sale of gas has dropped almost 40 million gallons and this has created a shortfall because the state gas tax is based on per gallon sales.

It’s estimated that Vermont would need an additional 33 million dollars next year to take full advantage of all the matching federal funds that are available to repair roads and bridges.

The House Transportation Committee has come up with a plan that raises almost $22 million in new gas tax revenue and the proposal also includes 11 and a half million dollars in bonding funds.

In the first year, the plan imposes a 2% tax on the price of gas. Then in 2015, the rate increases to 4% but the current 20 cent per gallon tax would be reduced by almost 6 cents. The net effect would be a roughly a ten cent per gallon tax increase.  Colchester Rep. Pat Brennan is the chair of the House Transportation committee.

"We’re not totally getting off the cents per gallon but we’re weaning ourselves away from it a little bit and expanding to a percentage it’s basically a reconstruction of the way we tax gas."

Brennan says the committee faces a stark choice; raise new revenue or watch the state’s roads fall apart.

"I think if we weren’t to implement any sort of remedies to our current situation we’d be falling further into a state of disrepair and thus creating a hole that would be impossible to climb out of."

The plan is being opposed by the Vermont Chapter of the National Federation of Independent Businesses. The group has roughly1,800 members and spokesperson Shawn Shouldice says a large majority opposes any increase in the gas tax.

"I think they’re very concerned that they’re already struggling if you drive around town you’ll notice the gas prices are anywhere from mid 3.70s to mid 3.80s," said Shouldice. "And when you add another 8 to 11 cents a gallon it adds up quickly."

Governor Peter Shumlin is waiting before he endorses a specific plan but he says there is no doubt that Vermont needs to raise at least $20 million to match the federal funds that are available.

"I believe we’re making a big public policy mistake in terms of growing jobs and economic opportunities if we let our crumbling roads and bridges deteriorate on us because we didn’t have the courage to raise the money here to assure that we get 80 cents on every dollar out of the feds."

The plan is expected to be approved by the House Transportation committee this week – if that happens – it will be sent to the Ways and Means committee for its consideration.

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