Current weather:  39° F   cloudy

sponsored by:

Governor calls for Idaho gas tax hike

Betsy Z. Russell
Staff writer
December 4, 2008

BOISE - Gov. Butch Otter informed legislators today that Idaho needs to raise its gas tax, increase car and truck registration fees, tax rental cars and more to fund pressing transportation maintenance needs around the state.

“What will be revealed in January is whether we have the political will, the political courage to make the choices that are needed,” Otter said in a speech he planned to deliver to the Associated Taxpayers of Idaho today, but because the governor is suffering from bronchitis, his chief of staff, Jason Kreizenbeck, delivered his prepared remarks for him.

Key details still are missing – including how much Otter will propose in gas tax hikes – but here are the main points of the transportation plan he unveiled today, to an audience that included much of the Legislature:

• He has ordered the Idaho Transportation Department to immediately cut its administrative expenses by 6 percent. The department, because it receives no state general funds, wasn’t subject to the recent holdbacks on the state budget. The governor also wants a group of business leaders to advise the department on efficiency, and is looking for savings pursuant to a legislative audit that’s soon to be completed.

• Both Idaho’s gas tax, which has stood at 25 cents per gallon since 1996, and vehicle registration fees would be raised, with the increases phased in over a five-year period. Said Otter, in his prepared speech, “We’re trying to accomplish 2008 goals with 1996 dollars.” The registration fees alone would raise about $15 million the first year, and would continue to charge differing fees based on the age of the vehicle, like current registration fees. Otter also wants a tax on rental cars, “other internal steps” to shift money to road and bridge construction, and a task force to study Idaho’s truck registration fee system. Truck registration fees also would be raised in the coming year; the task force would recommend additional steps for future years to improve equity. “The bottom line is generating significant and reasonable ongoing revenue,” the governor said in his speech.

• The governor wants sales tax revenues from the sales of automobiles, tires, auto parts and related items tracked, as a possible first step toward tapping into some of those funds for transportation. Idaho currently devotes none of its general fund money, which comes largely from sales and income taxes, to transportation, relying instead on fuel taxes, registration fees and federal funds.

Initial reaction to the governor’s transportation proposals from legislators was mixed, but mostly positive.

“I’ve said all along that we need to focus at least on maintenance, so that we don’t fall farther behind,” said House Speaker Lawerence Denney. He joked, “With the volatility in the gas prices right now, if you didn’t report on it nobody’d notice that we’d raised it 10 cents a gallon.” But, he said, “With the down economy it’s going to be a tough sell.” He praised the governor for looking to user fees for funding.

Senate President Pro-Tem Bob Geddes said, “I think the governor showed some tempering from what his position was last year. … I think the governor is ready to come up with a package that works for not only the Department of Transportation, but for the people that have to pay for it.” However, he said, “I don’t think the crisis was created because we have 6 percent too much administration. I think we could run a little leaner in administration.”

Senate Education Chairman John Goedde, R-Coeur d’Alene, said, “My ears went up when he said he was going to start tracking sales tax revenue from motor vehicle-related sales, because anything that could get deferred from general fund revenue to transportation would have a definite impact on education. I see education as the catalyst that, when our economy turns, will springboard us into the limelight. We have to have workers that are ready to take the jobs that are already there.”

Senate Transportation Chairman John McGee, R-Caldwell, said, “I think it’s a good first step. The governor has now outlined what I think is a well-balanced approach to solving the problem. I like the part about accountability. If we’re going to ask for more money, then we have to make sure it’s spent right.”

House Assistant Minority Leader George Sayler, D-Coeur d’Alene, said the governor’s proposals are “kind of a consolidation of what’s been talked about the last year or two. I do agree that we need to increase the fuel tax – it was a mistake at the time probably not to adjust it” for inflation when it last was raised in 1996. Sayler said the accountability piece is important to gain legislative approval, but most of all, “We need to be adequately funded.” Fixing the transportation system, he said, “should help us get out of the hole a little sooner.”

back to top