UPDATED AND CORRECTED: After negotiations on Tuesday afternoon, with input from Gov. Peter Shumlin and House Speaker Shap Smith, the House and Senate Transportation chairs came to an agreement on the transportation bill, and gas and diesel tax elements. The diesel tax hike is now slightly higher, at 3 cents/gallon, while the gas tax hike is lower, closer to the Senate’s preference. The House voted this version out 107-36 in the early morning on April 24, 2013, with the Senate expected to vote later on Wednesday afternoon. VTDigger will post a new story later today.
The House and Senate Transportation committees failed to agree on how exactly to implement a gas and diesel tax hike on Tuesday, and so will convene a conference committee to hash it out within the next two weeks.
The two committees aim to pass legislation before May 1, to preserve $1.6 million in already allocated transportation spending, by collecting tax revenues in June, instead of waiting an extra month. Typically, bills go into effect on July 1.
House Transportation Chair Rep. Patrick Brennan, R-Colchester, presented a package to Senate Transportation that cut the House-approved provision that would create an automatic annual gas tax increase, based on inflation.
Brennan’s new proposal raised the gas tax by 7.2 cents per gallon in fiscal year 2015, and 7.68 cents in fiscal year 2016, compared to the Senate’s aim of 5.9 cents per gallon in FY15, and 6.38 cents the year after.
The Senate Transportation Committee couldn’t stomach that higher gas tax increase. Both committees agreed over the past few days to cut the diesel tax hike from 4 cents to 2 cents per gallon, but senators felt that the increased strain on the gas tax in the House’s latest proposal seemed disproportionate.
The Senate approved a 4 cent diesel tax increase late last week, arguing that the provision distributes the tax burden equally among all users of the state’s roads.
Secretary of Transportation Brian Searles, representing the Shumlin administration on this matter, declined to comment on the administration’s preferred balance between the gas and the diesel tax.
Each 1 cent rise in the diesel tax raises about the same revenue as a 0.2 cent increase in the gas tax. Each cent increase in the gas tax leads to about $3.2 million in new revenues.
Brennan argued that the House version makes the gas tax a more permanent fix to the state’s declining income, keeping revenues robust for several years. But Sen. Dick Mazza, D-Grand Isle, countered that burdening working Vermonters through gas taxes should be an issue debated again in two or three years, if necessary.
Joe Choquette, a Vermont Petroleum Association lobbyist who opposed the gas tax hike, told VTDigger that 20,000 Vermonters have signed a statewide anti-gas tax petition.
