A petition circulated by the Vermont Petroleum Association has gathered more than 4,000 signatures around the state from people who oppose the Shumlin administration’s plan for a new sales tax on gasoline.
“We urge the administration and legislators to look elsewhere for revenues that don’t hit working Vermonters the way a hike in the gas tax will,” said Joe Choquette, a lobbyist for the Vermont Petroleum Association, in a statement.
If the state doesn’t raise about $36.5 million in new revenues, it could lose $65 million in federal transportation funds. The four percent sales tax, phased in gradually over two years, is a key element in the state’s plan to raise that $36.5 million to upgrade the state’s ailing roads and bridges.
In an interview, Choquette suggested that an alternative to the gas tax could be hiking registration costs, among a menu of 15 different fees and taxes which a study panel devised to combat transportation funding shortfalls.
He said the burden of coming up with an alternative to the gas tax lies with the Legislature. Suggesting an alternative is “not our concern,” said Choquette. “We’re worried about staying in business, frankly. Where the money comes from is not our responsibility.”
But Sue Minter, the state’s deputy transportation secretary, countered that a gas tax works well because visitors from out of state must pay it as well, thus easing the burden on Vermont residents.
“Any of the other revenue sources, such as fees, or the sales tax on cars: all of those sources are paid for only by Vermonters,” said Minter. “We want to take advantage of the fact that we have a lot of visitors to our state, who also drive on our roads.”
Although she acknowledged the likely unpopularity of a new gasoline tax, Minter argued that if people understand what the tax is needed for, they could support it.
“If you ask people if they want their gas tax to go up, they’re going to say no,” said Minter. “But the question really is: do they want their bridges to be safe and their roads to be in good repair? Then the answer is going to be overwhelmingly yes.”
“We don’t want to raise the gas tax, but we know the public does want to have safe roads and bridges, and it’s our job to maintain that,” she said.
The petition reads in part: “Vermont lawmakers are considering a 8-10 cent increase in Vermont’s gas tax. Such a tax will make gasoline in the state even more expensive, with total state and federal taxes of more than 53 cents per gallon!…Tell Vermont lawmakers you are already paying enough!”
But Rep. Pat Brennan, R-Colchester, who chairs the House Transportation Committee, told VTDigger earlier this week the hike only comes to 6.7 cents extra later this year, with an additional 7.5 cents by the second year.
Choquette dismissed those discrepancies as minor and due to recent legislative tweaking, saying a 7.5 cent increase still hugely impacts gas retailers near the border with New Hampshire.
Part of Choquette’s concern is that the difference between gas prices at the New Hampshire border will put Vermont gas sellers out of business. Under this proposal, total state and federal gas taxes here would rise from 45.1 cents per gallon to 51.8 cents per gallon come June 1.
That tax burden automatically increases with the price of gas and with inflation, because the new plan ties the tax to the consumer price index. Meanwhile, according to Choquette, the tax burden in New Hampshire would stay at 38 cents per gallon, and that in Massachusetts would be 41.9 cents per gallon.
Choquette’s analysis is backed up by industry summaries produced by the American Petroleum Institute. Data, however, shows that Vermont is also close to nearby states with tax burdens higher than 48 cents per gallon, like New York, which at 69 cents per gallon has the highest gas tax rate in the nation.
Minter, however, points out that New Hampshire is looking at a gasoline hike too. The New Hampshire House yesterday passed a 15 cent per gallon gas tax hike, noting that Vermont is not the only state debating over how to fund maintenance of crumbling public infrastructure.
Choquette said he doubts that the 15 cent hike in New Hampshire, double what’s being proposed here, will become law, however. He believes neither New Hampshire Democratic Gov. Maggie Hassan nor the Republican-controlled Senate favors a gas tax raise.
In a statement, Jim Harrison of the Vermont Grocers Association, pointed out that in 2009, as the Legislature imposed the transportation infrastructure bond (TIB) two percent tax, people were told New Hampshire would raise its tax, but eventually didn’t.
“We were told then that New Hampshire would raise its tax at the same time,” said Harrison. “New Hampshire did nothing, and our taxes are now more than seven cents a gallon higher at the border.” If New Hampshire does nothing and Vermont passes its tax, said Harrison, the difference will become 13 cents per gallon.
