Business & Economy

Trucking firms plead for moderation in diesel tax increase

A four cent hike in the state’s diesel tax is under discussion in the Senate Transportation Committee, leading representatives for truckers and bus drivers statewide to plea for “moderation” in any such increase.

A four cent per gallon increase on the state’s 29 cents per gallon tax, which accompanies a 24.4 cents per gallon federal tax, would raise $2.4 million. According to lobbyists for the fuel industry, Vermont’s diesel tax burden is about 16th highest in the nation.

Roland Bellavance, who leads the Vermont Truck and Bus Association, said a four cent increase could add $10,000 to $20,000 in taxes per year to his weekly $200,000 fuel expenses, for his trucking firm Bellavance Trucking, which racks up more than 10 million miles per year.

Figures like that led Ed Miller, a lobbyist for the association, to ask lawmakers for a lesser hike, or “a small a tax as possible.” Even though the tax would be phased in over two years, he said the eventual four cent hike amounts to a 14 percent increase on existing diesel taxes.

“To cut to the chase, I would ask the committee to try to keep the extent of the increase just as low as you can,” said Miller. “I think our members were prepared for a cent, or maybe two cents. … If the second biggest expenditure of a company is fuel, you pay more attention to what your level of taxation is, than you or I might when fueling a car every week or every two weeks.”

But Miller also said that the Senate and House transportation committees had treated the trucking industry fairly in the past few years. He added: “We all understand that we need infrastructure repair, and we’re not in any sort of denial.”

This year, the state must raise about $36.5 million so as not to lose out on about $56 million in federal transportation funds. The House approved a major gasoline tax increase last month despite strong Republican objections.

Part of the reason for raising the diesel tax, explained Senate Transportation member Sen. Richard Westman, R-Lamoille, is to balance the tax burden broadly and fairly among all users of the state’s transportation infrastructure. He noted that trucks, as heavier vehicles, do more damage to Vermont’s roads than most cars.

“You have to figure out a way to apportion this evenly amongst all the users,” said Westman, a former chair of the House Transportation Committee. “You can’t pick out one group. … Everybody has to feel the pain of this increase, to be able to make it fair.”

But Matt Cota, executive director of the Vermont Fuel Dealers Association, argued that the tax hike would impact heating oil trucks disproportionately.

He estimated that a four cent hike would add $100 annually in diesel taxes for each heating oil truck. Legislation in the state’s fee bill raises meter inspection fees on these trucks by $100. The two increases would have heating oil dealers paying the state $300,000 more in taxes and fees collectively than they did last year, said Cota.

Brian Searles, the state’s Transportation secretary, declined to comment on a potential diesel tax hike, saying policy discussions weren’t yet finalized. A diesel tax hike was not mentioned in the administration’s original transportation proposal, presented in January.

The legislation under discussion also mandates a study on how to best tax vehicles powered by electricity and natural gas, to be done by Dec. 15.

The Senate Transportation Committee is scheduled to work on the bill, which details state government’s overall vision for transportation in Vermont, throughout this week.

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Nat Rudarakanchana

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  • Michael Gardner

    The cost to register these heavy vehicles is also well over $1,000 per year. Significantly more than a regular car.

    How about we stop robbing the transportation fund, might be the logical place to start

  • Peter Liston

    The big trucks tear up the roads like crazy and they should pay their fair share to keep the roads in decent condition.

    Plus, a fair amount of the diesel tax is paid by out of state truckers who are passing through the state.

    We don’t need to be subsidizing the trucking industry. They can pay their share for road maintenance.

    • James Fordham

      I agree with Peter. We all see the “ruts” left by the big trucks on I 89…Bolton Flats, between the southbound Montpelier/Berlin exits (8 & 7)…and we wonder why there are accidents when rain (hydroplaning) gets in those ruts. I actually think that they should pay more because they do damage the roads. And trying to drive your car out of the ruts is dangerous.

      • Moshe Braner

        Road damage is proportional to (axle) weight raised to the FOURTH POWER. That means that a 30,000 pound truck causes 10,000 times more damage to the road than a 3,000 pound car. In other words, the vast majority or road damage is done by heavy trucks.

        • Moshe,

          That is exactly right; 4th power, because it is a moving load.

          Heavy truck: 100,000 lb, (truck + payload)/4 axles = 25,000 lb/axle
          They have 14 tires, because with fewer tires, the tires would be overloaded.

          Light vehicles cause almost NO damage to road pavement and bridges.

          4,000 lb/2 = 2,000 lb/per axle

          12.5 to the power 4 = 24,414 times the damage!!!!!!

          A PROGRESSIVE tax per axle weight is required; the greater the weight, the greater the RATE of tax.

          Below 5,000 lb/axle no tax., i.e., about 90% of all vehicles would pay no tax.

    • Tony Redington

      Peter correctly points out the damage trucks do–a loaded truc does a 1000 times the damage of a car to pavements, a major cost of maintaining highways.

      However, he touches a nerve–the Governor and the two Transportation Committees continue–on purpose–to be like the three blind mice. The last cost responsibility study showing what each type of vehicle (cars, dump trucks and the ubiquitous tractor trailer) was in 1989–it needs to ve done now and with software now available can be easily updated in house by AOT. That 1989 study showed a trend towards under taxing heavy vehicles. So the three blind mice go merrily on totally ignorant (and politically intentiionally ignorant) of how much to charge trucks. Would it not be a surprise to find out they are severely undertaxeed? Note also the AOT study which showed about a thrid of all tractor trailers entering Vermont from Canada never stop in Vermont–can you guess if these folks are paying their damage to the interstate highwys?

      Oh well, as they say, ignorance is bliss.

      Tony Redington Blog:

  • Moshe Braner

    “… a four cent increase could add $10,000 to $20,000 in taxes per year to his weekly $200,000 fuel expenses…”

    – He must be paying 40 cents a gallon before the four cent increase, uh?

    • Moshe Braner

      OK, he said “per year”. Nice ploy there, to mix weekly and annual numbers. Wouldn’t be as persuasive, but would be more truthful, if he said “could add $400 in taxes to his weekly $200,000 fuel expenses”.

  • Bob Kuehn

    I don’t know about everybody, but when the prices of fuel went up several years ago my fuel oil dealer tacked on a $5 “fuel surcharge”. That sort of rubbed me the wrong way. Am I supposed to come and pick it up myself? The charge is still there today. Cota – deal with it. You guys will just pass it on to the consumer as you have done in the past.

    • Moshe Braner

      Oil prices have risen and have stayed high, despite all the hoopla over “fracked” oil from ND & TX. The 2012 annual average oil price was the highest ever. This has consequences we cannot escape. Our heating and transportation cost more. Deliveries cost more. And so does road maintenance. Yes, this eats into our “disposable income” that is left for spending on less essential things. That’s reality, and we’d better sober up from the cheap oil fiesta hangover and face it, since cheap oil ain’t coming back. Global oil supply has been almost constant since 2005 despite trillions in investment. There’s only that much easily-extractable oil to be had on a finite planet, and we’ve used up most of it.

  • Nicholas Bartenhagen,

    If readers of comments to this VTDigger article wish better understand the facts that underlie Moshe Braner’s prescient 11:04 pm observation, I suggest they peruse a December 12,2012 post by Gail Tverberg on her website ‘Our Finite Planet’ entitled “Why Malthus Got His Forecast Wrong”.

    • Bruce Post

      Thank you for the tip. I was unfamiliar with Gail Tverberg’s work. She seems factual, provocative and prophetic, a lot like Moshe. They both penetrate the fog of denial that seems to envelop our culture, including here in Vermont.

  • Heavy trucks, up to about 100,000 lbs, cause at least 90% of the damage to the road surface.

    Light vehicles, such as cars, SUVs, 1/4-ton trucks, and minivans, up to about 4,500 lb, cause almost no such damage.

    There should be a progressive vehicle tax based on weight; the heavier the vehicle, the greater the rate.

    • Lee Stirling

      I agree with you 100%. But in terms of the progressive (by weight) vehicle registration fee, I think it should extend all the way down to motorcycles and small passenger vehicles. It ought to cost less to register a motorcycle (by weight) than a small sedan. It ought to cost less to register a small sedan (by weight) than a large SUV. And on, and on… This same logic can be applied to trailers too. a 10-foot, single axle, 2000lb capacity trailer should cost less to register than a 30-foot, triple axle 15,000lb capacity trailer.

      • Lee,

        I am proposing a road DAMAGE tax. Below 5,000 lb/axle, there is no damage

        Car: 2,000/axle
        Not so heavy vehicle: 5000 lb/axle

        Not so heavy vehicle: 5000/2000 = 2.5 to the power 4 = 39 times the damage of a car.

        Heavy vehicle: 25,000/2000 = 12.5 to the power 4 = 24,414 times the damage.

        The heavy trucks do all the damage, but want to have diesel tax relief!!!!

        Registering vehicles is another matter.

        • Steve Raphael

          I am all for a tax that proportionately impacts heavier vehicles but the “diesel tax” may not the best way to get there. Diesel cars are obviously in the minority but there are a lot out there (should a small car driver who is minimizing the pollution of their vehicle pay more?)

          I would rather have weigh stations used on expressways.

      • Peter Liston

        Registration only covers the Vermont based trucks. The out of state trucks that beat on the roads need to pay for the service as well. That’s why the diesel tax works better.

        • A road damage transit tax?

        • Robert Rich

          Peter – the trucks passing through don’t stop and buy diesel here. First of all we have only a few truckstops..secondly, for long haul truckers, Diesel is too expensive already in Vermont. They fill up their 200 gallon tanks in NH or PA where it is cheaper and pass right through on their way to Canada. The diesel tax hits the landscaper and local excavator the hardest because they don’t go out of state.
          Before all you “experts” keep typing responses maybe you should google “apportioned registrations”.

          • Peter Liston

            Robert, a fair amount of freight is delivered TO Vermont and OUT OF Vermont. The trucks doing this service aren’t ‘passing through’. If they were, our stores and factories would be empty.

            Additionally, the diesel tax is paid by companies like MBI Trucking and Bellavance. These companies do way more damage to Vermont roads than people in small passenger cars do and they should pay their own way. There is no need for us to be subsidizing their businesses by letting them bust up our roads for their personal profit.

            And to the extent that local tradesmen are driving heavy diesel vehicles on our public roads, they should also pay their own way.