– After an hour of divided testimony and minimal discussion, a House committee approved the first major transportation funding measure of Idaho’s legislative session Wednesday.
The proposal generates an estimated $68 million the first year, growing to $100 million by year four. It includes a temporary 5-cent fuel tax increase, a 2-cent increase in the wholesale fuel transfer fee and adds a registration fee surcharge for electric and hybrid vehicles.
Besides these traditional user fees, the bill also dips into state general fund revenues, which are used to pay for public schools and other basic government services. Whenever general fund revenues grow more than 4 percent per year, 0.4 percent of that would be shifted to the highway maintenance account. For every $20 million collected in this way, the 5-cent fuel tax increase would be reduced by a penny, until it drops back to the current level of 25 cents per gallon.
“It seems like no matter which direction we went, there were people telling us we didn’t go far enough and people telling us we went too far. … This is something we can do right now,” said Rep. Jason Monks, R-Meridian, who co-sponsored the bill with Rep. Greg Chaney, R-Caldwell.
A host of lobbyists testified for and against the proposal during a hearing before the House Transportation and Defense Committee.
Some objected to the use of general funds, saying that puts transportation in direct competition for funding with public schools. Others opposed the wholesale transfer fee, which is charged on any fuels, whether they’re used for on-road or off-road vehicles.
“In our mind, that’s like forcing nonsmokers to pay a cigarette tax,” said Russ Hendricks with the Idaho Farm Bureau. “That’s not really an appropriate fee for funding road infrastructure.”
But organizations like the Association of Idaho Highway Districts and Idaho Transportation Coalition said the bill represents “a good start” toward addressing Idaho’s $262 million annual shortfall in maintenance funding.
“If you’re waiting for a perfect bill, you aren’t going to get it,” said Jeremy Chou, representing the American Council of Engineering Companies of Idaho. “If those who oppose this bill get their way, there won’t be any transportation funding this year … This is the best you’re going to get. If you’re looking for more, if you’re looking to placate everyone, you aren’t going to get anything.”
The Transportation Committee voted 12-4 to send the measure to the House floor with a favorable recommendation.
Rep. Paul Shepherd, R-Riggins, voted against the bill. Although he agrees there’s a need for more money, he doesn’t favor boosting the wholesale transfer fee.
“All the farmers and loggers and agriculture folks said they don’t like it because it’s a hidden tax,” he said after the hearing. “It’s a bad approach. It’s better to have it all up front in the gas tax.”
Rep. Dan Rudolph, D-Lewiston, supported sending the bill to the House floor, but he prefers an alternative bill that relies more on fuel taxes and vehicle registration fees and that takes a smaller amount out of the general fund.
That proposal, sponsored by House Majority Caucus Chairman John Vander Woude, R-Nampa, is being modified and will be re-introduced later this week.
Rudolph noted there’s also a third proposal lurking, which would permanently take $120 million from the general fund and use it for roads.
“That’s an ugly one,” he said. “I voted for this (Monks-Chaney bill) as a fallback, but I think Vander Woude’s bill is the preferred alternative.”
The Associated Press contributed to this story.