By Rep. Mark Semlek
The General Session of 62nd Wyoming State Legislature will begin at noon on January 8. I have had several people contact me recently about proposed bills that the legislature will be considering during the 40 day session. I would like to mention a few points regarding the proposed 10 cents per gallon fuel tax increase in this first Legislative update.
I am not particularly advocating for or against the fuel tax increase in this discussion but I would like to share with you some points that the citizens of Wyoming and the legislators should think about when considering this tax increase that will raise about $70 million per year.
A fuel tax is a use tax, the more fuel you use, the more total tax you pay and the more of your tax dollars go for the maintenance of Wyoming roads; all public roads including highways, streets and county roads. As a tax policy, regardless of your support for the tax increase, the fuel tax tends to be one of the fairest tax imposed because all the revenue collected is targeted for road maintenance and paid for proportionally by the people who use the roads. If you believe that WDOT is doing a good job of operating as effectively and efficient as possible and additional revenue is needed for their short term and long term maintenance programs, you could likely support the fuel tax increase. On the other hand, if you believe most public agencies and departments can always become more efficient with public tax dollars and an additional saving within WDOT could provide a part of the $134 million shortfall that they are asking for. Or perhaps you believe there is a compromise where a smaller fuel tax increase could accompany a decreases in WDOT current operating overhead . The information that I have regarding WDOT budget would suggest that they have decreased the number of employees by about 10 % over the last few years. Most of us would probably agree that the services provided by WDOT have not noticeably changed even with this reduction in force. However, there is no doubt that material costs have risen for WDOT in the last several years with an increase in oil prices as they effect the cost of asphalt.
WDOT receives about half of it revenues from Federal fuel tax collected and those revenue have been generally flat in recent years. For every $1 of Federal Fuel Tax that is collected in Wyoming, $1.05 is remitted back to the state. With the fiscal challenges in Washington, this fuel remittance policy could change, reducing Federal Highway funds to Wyoming.
If you believe WDOT could use additional fuel tax revenues, you could reconcile the increase as Wyoming has one of the lowest state fuel taxes in the nation. The proposed fuel tax increase would put our taxation rate more at par with the boarding states.
If you believe that the declining Federal Highway funds and the increased construction costs would justify an increase in revenues for WDOT, I would suggest that an increase in the fuel tax would be the preferred way to make up shortfalls compared to continuing to add to WDOT ‘s revenues by appropriations from the State’s General Fund. About 52% of fuel tax collected in Wyoming is paid by non-resident travelers who contribute to half or more of the road use and deterioration . Public road use should be paid for by the users on an equitable basis. Again, if we provide funding for the WDOT out of the State’s General Fund, the taxpayers of Wyoming are essentially providing 100% of the additional funding while our highways are used 52% by out-of-state travelers and many of those vehicles are trucks on Interstate 80.
I have shared with you some of the perspectives surrounding the proposed fuel tax increase. I am mindful of other perspectives that you might have and I appreciate hearing from on this issue and other issues that will be considered in this year’s legislative session. Mark