Feb. 24—CHEYENNE — A legislative committee advanced a bill Tuesday that would increase the state's per-gallon fuel tax by nine cents, or about a third above its current level, as transportation officials seek ways to fund the ten of millions of annually unmet road needs in Wyoming.
House Bill 26, which was sponsored by the Joint Revenue Committee during the interim session, would boost the state's gasoline fuel tax from 24 cents per gallon to 33 cents, which would be a 37.5% increase. If passed by the full Legislature, the bill would generate roughly $61.4 million in annual revenue, divided between the Wyoming Department of Transportation, and cities, towns and counties.
The proposal, which would mark the first fuel tax hike in Wyoming since 2013, had the backing of WYDOT Director Luke Reiner. During the meeting Tuesday, he said the state needs to take "a careful look at what we're doing with our infrastructure and maintain what we have," with about a third of Wyoming's roads in substandard condition.
"It ends up costing us more to replace (the roads) than it would to maintain them," Reiner told the committee. "I'm sort of a trend type of guy, and as I watched the trends ... the percentage of good roads is going down, and the percentage of fair and poor roads is going up. So, those are probably the trends that we would prefer are not in that direction."
Reiner also noted a report released late last year found WYDOT is facing an annual funding gap of roughly $354 million, with more than $100 million of those needs projected for the preservation of Wyoming's roads and bridges.
WYDOT has gotten "a great shot in the arm" through the federal COVID-19 relief package passed by Congress last December, to the tune of $63 million, Reiner said, though those funds will only go so far.
"It's really nice," Reiner said of the federal funding. "It doesn't solve our annual funding shortage, but it does help in the short term, and we're working through how to put the majority of that money on the roads as we speak."
Wyoming's current gas tax of 24 cents ranks 38th among all states, according to data from the Tax Foundation. A nine-cent increase would more closely align Wyoming with the fuel tax rates in neighboring states, such as Idaho and Montana.
During discussion Tuesday, the fuel tax proposal had the support of several industry groups, including the Wyoming Trucking Association, the Wyoming Taxpayers Association, the Wyoming Lodging and Restaurant Association and the Wyoming Association of Municipalities. The main opposition during the meeting came from the Wyoming Farm Bureau Federation and the state's chapter of the National Federation of Independent Business.
Mark Larson, executive vice director of the Wyoming Petroleum Marketers Association, noted a recent national study, which looked at fuel tax changes in 29 states between 2013 and 2018, that found only an average of one-third of any fuel tax increases were passed on to residential customers.
"These results confirm previous research that suggests state fuel taxes are just one component of a complex pricing scheme that includes consideration of the price of crude oil and other state-specific (dynamics)," Larson said. "I've been saying this for the 45 years I've been in the business: the street sets the price of fuel, and it's based on myriad of factors, fuel tax just being one."
The proposal also had the backing of the Wyoming Stock Growers Association. Jim Magagna, the association's executive vice president, said while his members normally stand by an anti-tax policy across the board, they felt differently about House Bill 26.
"The feeling was that, unlike many tax increases, which, from our perspective, support more government, this is a tax increase that supports a very fundamental infrastructure that's necessary to a lot of Wyoming's economy and lifestyle, and certainly our industry," Magagna said.
"We've experienced, just in the last year or so, an issue or two where our members who have to transport particularly heavy loads of livestock when they're going to market with them were unable to use certain roadways because of bridge weight restrictions that WYDOT was forced to put into place, and that became a serious challenge ... basically, (it) comes back to lack of funding."
With its subsequent approval by a 6-3 vote in the House Transportation, Highways and Military Affairs Committee, House Bill 26 becomes the second revenue-raising measure to be advanced by a legislative committee this year, following the House Revenue Committee's endorsement of a tobacco tax increase last month. Both bills could be debated by lawmakers when they reconvene for their general session starting next week.
Resolution requiring tax measures go to the voters fails
In a separate committee meeting Tuesday afternoon, lawmakers rejected a proposal from a Rock Springs senator that, if approved, would have required any tax measure in Wyoming to win majority approval from voters in a general election in order to take effect.
Senate Joint Resolution 1 came from Sen. Tom James, R-Rock Springs, who said the proposal's intent was to give people a more direct voice in the civic process.
"Currently, a lot of people don't have the ability to voice their opinion on taxes, because a lot of it happens during business hours, and this will give them the opportunity to voice their opinion at the voting booth," James told his fellow members of the Senate Revenue Committee. "They can send emails or call their legislators, but from what I've been hearing when they contact me is their legislator doesn't respond."
James added the proposal would encourage the Legislature, as well as county and city governments, to look for other forms of revenue beyond tax increases.
However, the proposed constitutional amendment drew pushback from a handful of officials who testified during the committee meeting. Tate Mullen, governmental affairs director for the Wyoming Education Association, called the proposal "an abdication of legislative fiscal responsibility."
"It takes even new legislators a couple of years to familiarize themselves with the (budget) process and to familiarize themselves with all the accounts, the way the money moves," Mullen said. "For us to have this level of expectation that citizens can, at the whim, take on this role of a state budget analyst is irresponsible. It is the Legislature's duty to perform these roles."
The proposal was also opposed by the Wyoming County Commissioners Association and the Wyoming Association of Municipalities. During the meeting, the only support for the measure came from the Wyoming Farm Bureau Federation.
Before the vote on the bill, James said he heard from many individuals across Wyoming who were supportive of the measure.
"I noticed today that a lot of government were speaking out against this bill, and that was no surprise that government would be speaking out against this, because they might have another layer that would prevent them from being able to get more funding," James said.
The measure was defeated by a 4-1 committee vote, with only James voting to advance the measure to the Senate floor.
Tom Coulter is the Wyoming Tribune Eagle's state government reporter. He can be reached at firstname.lastname@example.org or 307-633-3124. Follow him on Twitter at @tomcoulter_.