Gas and diesel tax hikes
State lawmakers hiked the gas tax by 6 cents per gallon, effective May 2013, and the diesel tax by 3 cents per gallon, over two years.
The Shumlin administration, along with the House and Senate, argued that raising the gas tax, a politically unpopular move, was the only way to prevent losing about $60 million in federal transportation funding.
Many viewed the tax hike as a broad-based tax increase, or a hike impacting a broad cross-section of Vermonters. Gov. Peter Shumlin argued that his pledge not to raise broad-based taxes referred only to General Fund taxes.
Others saw the tax as regressive, harming poorer Vermonters who must drive far to work. But despite Republican opposition in the House, and a smattering of opposition in the Senate, both chambers passed the gas tax handily.
The legislation levied a 2 percent sales tax on gas, effective May 1, 2013, until July 1, 2014. In July 2014, that sales tax is doubled to 4 percent. But at the same time, the state’s current excise tax of 19 cents per gallon will be lowered by six cents, largely offsetting the 2014 increase.
The sales tax is also subject to a floor and a ceiling, which protects both the state and drivers should the price of gas fluctuate wildly. From July 2014, if gas prices vary between $3.87 per gallon and $5.09 per gallon, the gas sales tax will accordingly vary from 6.5 cents per gallon to 11.1 cents per gallon.
But the tax will never be less than 6.5 cents per gallon, even if gas costs less than $3.87. Similarly, the tax will never be higher than 11.1 cents per gallon, even if prices move above $5.09 per gallon.
Twenty thousand Vermonters signed on to a petition against the tax by the end of the session, according to petroleum lobbyist Joe Choquette.
The gas and diesel tax increases will raise $20.4 million in new revenues in fiscal year 2014. Lawmakers have the option of reviewing and potentially increasing the gas tax slightly, to reflect inflation, by adding language to the state’s fee bill.
Migrant worker licenses
About 1,500 undocumented farmworkers won the right to drive this session, after two years lobbying for driver’s licenses.
The Senate backed the move 27-2, but the legislation met more resistance in the House, where Republicans argued that a new driver’s privilege card for undocumented immigrants could spur identity theft and undermine national security.
In the end, the House voted 105-39 to create these new privilege cards. Amendments requiring fingerprinting, criminal background checks, and a check against a Department of Homeland Security terrorist watchlist, for applicants for these cards, all failed.
Gov. Peter Shumlin backed the legislation at a November press conference. Migrant farm workers and their advocates, who intermittently appeared at the Statehouse, said the licenses would allow sorely needed mobility, and amounted to a matter of equal human rights and dignity.
New Mexico, Washington and Utah all allow undocumented residents some form of driving rights. Tennessee and Oregon formerly issued some type of license, but have repealed their laws. According to the state’s study committee report, New Mexico faced fraud problems.
A fiscal note from the Joint Fiscal Office says that $20,000 to $40,000 in new revenues could be raised through charging for these cards. Applicants must provide two forms of documentation and prove they are Vermont residents for the new privilege cards, which will be distributed after Jan. 1, 2014.