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Otter, legislative leaders hint at gas tax hike, other increases

Otter, legislative leaders hint at gas tax hike, other increases

Dustin Hurst
January 8, 2015
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January 8, 2015

Gov. Butch Otter and Idaho’s legislative leaders hinted Thursday that state residents and businesses may soon pay more to travel around the Gem State.

Speaking at an annual legislative preview meeting Otter told reporters Idaho must invest in the state’s infrastructure soon, or risk paying more for repairs later.

“I haven’t specifically spoken to leadership or chairmen about where we’ll look to increase transportation funding, but I do know we’ve got about 700 bridges that are past their designed lives,” Otter said.

Transportation funding has served as a contentious issue in the Idaho Capitol for years. Otter sought a gas tax hike in 2009, but then-state Rep. Raul Labrador, R-Eagle, successfully orchestrated the effort to kill that. Labrador now serves in Congress.

Idaho hasn’t hiked its gas tax since 1995, but some lawmakers suggest low gas prices give them the power to make travelers pay more for fuel.

Otter didn’t tip his hand as to how exactly he wants to pay for new spending on road maintenance, but suggested legislators might examine the gas tax hike and pair it with a registration fee increase.

To do nothing, the governor warned, would only further burden Idahoans. “Deferred maintenance is deficit spending,” he said. “We have to maintain our infrastructure.”

To arrive there, Otter seems to realize it’s an uphill fight and he may struggle to win over cash-strapped Idahoans enjoying a rest from high fuel prices. The governor, though, thinks he can get there. “I think if we can demonstrate the need and purpose,” the governor said, hinting his administration will forward that message this year.

Otter may not need to work very hard to convince legislative leaders, Republicans and Democrat alike, to hike taxes or fees -- lawmakers appear ready to go along with the effort, though they want more details.

Speaker of the House Scott Bedke, R-Oakley, predicted some sort of package would emerge from the House, where all tax hike bills must begin.

“I think there’s growing interest in addressing this issue,” Bedke said. “The citizens of Idaho have invested billions of dollars into the infrastructure system and it needs proper amounts of input -- money -- to keep it up.”

A 2010 transportation task force suggested a gas tax hike, but lawmakers didn’t take up the idea in the midst of the economic recession. The Idaho Department of Transportation says the state needs $250 million to catch up on maintenance projects, not even addressing improvements.

Senate Minority Leader Michelle Stennett, D-Ketchum, endorsed squeezing more out of taxpayers for roads, but warned the deal could go sideways if not properly formed.

“It’s going to have to come from a lot of different sources,” Stennett said. “And that’s where the disagreement is going to be. If you have that kind of dialogue, you’re going to get sideways with some legislators.”

Still, Bedke says it’s on. “What that will look like, I can’t predict that at this point,” he said. “I think we will get there this year.”

Otter noted Idaho might take a cautious approach because Congress, led by Republicans, may seek a federal gas tax hike to replenish soon-to-be-depleted highway funds. The federal government tax is 18.4 cents, a level set in 1993.

One critic wants Idaho lawmakers to look elsewhere for dollars. “Taking advantage of lower gas prices to try to hide a tax increase is a dirty trick,” said Joe Luppino-Esposito, a senior researcher for State Budget Solutions. “If the revenue really is necessary, the argument to increase gas taxes should be justifiable no matter what the price is.”

He wants Idaho lawmakers to consider using general fund dollars -- as opposed to dedicated lines of revenue like the gas tax -- to pay for more road work.

“Properly budgeting and allocating money from the general fund and using it to improve infrastructure can be done, but other cuts will be necessary,” he said. “The key element isn't to just increase revenue but also to decrease spending, or in the least, prioritize spending on what Idaho residents need most.”

Idaho Freedom Foundation Vice President Fred Birnbaum wrote Thursday that maybe lawmakers should let drivers enjoy a break from high gas prices.

“Rather than using low gas prices as an opportunity to transfer more wealth to governments, let’s let Idaho families reap the benefit of lower prices at the pump,” he wrote.

Lawmakers begin their work Monday. Otter will lay out his agenda in his annual State of the State address  then, too.

Note: The Idaho Freedom Foundation publishes IdahoReporter.com. 

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