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Gas tax formula change expected to increase prices at the pump advances

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Gas tax formula change expected to increase prices at the pump advances

By Lisa Riley Roche | Posted - Mar. 3, 2017 at 11:30 a.m.



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SALT LAKE CITY — A bill that would adjust the complex formula used to calculate gas taxes easily passed a Senate committee Thursday even though it's not clear how much the price at the pump would increase.

The sponsor of SB276, Sen. Kevin Van Tassell, R-Vernal, said consumers likely would not see an increase until 2018 or even 2019, depending on the fuel market. He said a built-in price ceiling would cap the tax at about 40 cents.

He told the Senate Transportation, Public Utilities, Energy and Technology Committee that after the new formula approved two years ago that raised taxes about 5 cents to 29.4 cents a gallon, fuel prices dropped sharply.

"We're adjusting the mathematical formula," Van Tassell said, starting Jan. 1. The bill does not yet have a fiscal note projecting how soon the gas tax would rise and by how much.

That didn't stop the committee from voting unanimously to send the bill to the Senate floor.

The only concern raised about the bill came from the Utah Petroleum Marketers and Retailers Association's John Hill, who told the committee the group was opposed to raising the gas tax unless the state returns to a "straight-up" per-gallon rate.

Hill said the group's members "are concerned about the reaction by our convenience store customers when they get another tax increase on Jan. 1 after seeing one only two years ago."

Van Tassell said he gets the concern.

"Believe me, I understand the cents-per-gallon. That would have been my choice. But we couldn't get that passed," he said. "We're dealing now with what was passed and modifying it to equal the best that we can come up with."

The senator said the state can't be shortsighted about transportation needs even though "as long as we can get where we want without any problems, all of us like to pay as little as possible. But the reality of it is, it costs money to build highways."

Lisa Riley Roche

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