The Senate Transportation committee is set to make a key change in the gas tax bill that was adopted by the House several weeks ago.
Lawmakers are eyeing the gas tax as a way to raise new revenue to allow the state to take full advantage of all federal matching money that’s available.
The Transportation Fund has a major shortfall this year because the gas tax is levied on a per gallon basis and sales have dropped more than 40 million gallons over the past 7 years.
Senate Transportation chairman Dick Mazza says it’s critical for the state to get its full share of federal transportation funds this year:
"One of the things that certainly have to rely on we can’t do on our own is the federal monies we need to help with out infrastructure," said Mazza. "And so we haven’t left federal money on the table for many years and we don’t intend to do it this year. So we must, we must match that money."
Under the House bill, the gas tax would transition from being a per gallon tax to a sales tax on the price of gas and Mazza likes this approach. But he opposes another provision of the House plan that automatically raises the gas tax based on the rate of inflation.
"I don’t think that’s something that Vermonters expect to us to do to have an automatic escalating clause so I think we ought to evaluate that."
Joe Choquette represents the Vermont Petroleum Association. He’s urging lawmakers to consider other revenue sources, like raising a number of fees, and he wants to expand the state’s transportation bonding program.
"We’re currently bonding for only $25 million out of a potential $100 million that’s available to use now so we have said we know that that gas tax has to be part of the solution," said Choquette. "But can we look at some other places for possible revenue and maybe be a little more creative?"
And Choquette questions if it’s worth pursuing all the federal matching money this year.
"It seems like the carrot is about the same size of the stick here. That we can get $50 million but we’ve got to raise $36 million in taxes."
But Senate Transportation chairman Mazza says many local towns will be hurt if the state doesn’t receive all of the federal funds.
"Without this increase the towns will be hurt which rely on your property tax because we pass on the state level $50 million to towns in grants and programs so I think it’s more than just a state issue I think it affects towns and local tax rates."
Mazza says he sees this bill as a 3 to 5 year solution and that there will be other options for lawmakers to consider in the future.