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TRAFFIC

Idaho rental car tax falls flat

Two of the governor's proposals for funding transportation improvements have now failed.

BY BRIAN MURPHY - bmurphy@idahostatesman.com

Published: 03/05/09

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www.legislature.idaho.gov/legislation/2009/H0133.htm

Gov. Butch Otter spent much of last year canvassing Idaho to generate ideas and support for his plan to increase funding for Idaho's highways. The result: six proposals that in five years would generate $174.5 million.

But Otter's plans have struck a pothole in the Legislature, which on Wednesday defeated the second of his six proposals.

His plan to add a 6 percent tax on rental cars was defeated in the House Transportation Committee, 11-3. The proposal would have generated $2 million annually.

The same committee voted earlier not to send to the full House a bill that would have dramatically increased the cost of specialty license plates.

"It doesn't change our game plan," Otter spokesman Jon Hanian said.

Otter's proposal to eliminate the 10 percent tax exemption on ethanol passed the House 69-0.

The three biggest proposals - an increase in gas tax, an increase in vehicle registration fees and a shift in funding for the Idaho State Police - are still in committee and have not been voted on.

"We remain hopeful that lawmakers will take stock of the amount of work and the amount of input that went into this," Hanian said.

The rental car tax met strong opposition from rental car providers. Representatives from Enterprise, Hertz, National, Alamo and Budget testified against it.

They said the industry is in bad shape and cannot afford a tax increase, and said the tax is targeting one industry to combat a general problem. Their arguments held sway with many committee members.

"Now is not a time to go after this industry that's faltering right now," said Rep. Bob Nonini, R-Coeur d'Alene.

The gas tax, which would rise 2 cents per year for five years, and the vehicle registration fees, which would change the fee structure and feature double-digit increases, have also found strong opposition so far in the committee.

Brian Murphy: 377-6444

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