Jump In Gas Prices May Force Lawmakers To Rethink Tax Plan

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Members of the House Transportation committee are spending a lot of time these days discussing ways to close a $35 million shortfall in the state’s Transportation Budget.

The Shumlin Administration wants to take full advantage of all the federal funds that are available and that requires the state to provide 20 percent in matching funds.

Colchester Rep. Pat Brennan is the chair of the House Transportation committee. He says it’s critical for the Legislature this year to make road and bridge repair a top priority.

"Our roads are crumbling our bridges are crumbling we’re in the state of disrepair," said Brennan. "We’re better off than we were a few years ago but we’ve got a long way to go so we want to make sure that we don’t slip back and regress to the state we were in." 

The committee is looking at a plan that would lower the state gas tax from 19 to 14 cents a gallon, but at the same time, it would impose a 4 percent tax on the retail price of gas. 

Based on current gas prices, the plan would increase the state gas tax by 9 cents a gallon. Brennan says that might be too much in today’s economy.

"Given the current structure of gas pricing as we approach $4 a gallon we’re looking at filling our state match hole," said Brennan. "But if we do it all with the gasoline tax it might be a little hefty for people right now."

Richard Watts is the director of the UVM Transportation Research Center. He says several states are moving away from a flat per gallon gas tax and adopting a tax based on the price of gas.

"It may make more sense for states like Vermont, Maine has done this, to have your revenues as a percent of your gallon of gas versus a fixed fee," said Watts. "And then as these prices fluctuate the state’s revenue also can keep up with what the needs are."

Recently, Watts studied the outcome of gas tax debates in 6 states. He says the initiatives passed when the debate was focused on the condition of the state’s transportation system.

"In the states where it was communicated that the gasoline tax was needed to pay for a crumbling infrastructure or collapsing bridges those states had a higher likelihood of actually being able to increase their gasoline taxes."

Brennan says his committee is also exploring bonding options to provide the state with part of the money that’s needed to close the budget shortfall.


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