Shumlin administration proposes new gas tax, says it’s open to suggestions

Saying it’s still open to other options, the Shumlin administration this afternoon unveiled its plan to raise $36.5 million in new revenue for upkeep of roads and bridges.

It’s a little complicated, but the proposal calls for an increase in one gas tax, a decrease in another, and a $9 million bond that would be paid for by an existing revenue stream.

A new, 4-percent tax on the retail price of gasoline would raise about $43.5 million in new revenue. The administration then would cut the existing 19-cent per gallon gas tax down to 14.3 cents, which would cost the state about $15.5 million in revenue. The $28 million in net new revenue, when combined with the $9 million bond, would raise the money that Transportation Secretary Brian Searles says is needed to maximize federal matching funds.

If the state fails to raise the cash, Vermont stands to lose out on more than $40 million in federal money next year.

Searles presented the plan to the House Committee on Transportation shortly after the governor wrapped up his budget address. Rep. Patrick Brennan, a Colchester Republican who chairs the committee, said it’s too soon to say whether the plan will fly in the Legislature. He did however say that lawmakers are united in their resolve to raise whatever revenue is needed to avert the loss of federal matching funds.

One thing Brennan said he liked about the governor’s plan is that it’s indexed to keep pace with rising petroleum prices. While the existing per-gallon tax would get cut to 14.3 cents, it would also get an automatic annual increase tied to the consumer price index. And by basing the new tax on a percentage, as opposed to a flat per-gallon tax, it too will rise with inflation.

“I’d like to see us fix this thing once and for all,” said Brennan. “If I’m going to go on the chopping block for raising gas taxes, I’d like to do it right and not have to come back to it year after year.”

A committee that met over the summer to adders the issue of flagging gas tax revenues issued a report recently detailing more than 20 options to raise revenue. Brennan said many of them, however, like taxes on tire sales, or what amounts to a property tax on cars, are nonstarters.

He said there’s some interest in a tax on vehicle-miles traveled, but cautioned that that tax won’t even be a viable option for at least five years.

“And we’ve got an immediate revenue problem that needs to be solved now,” Brennan said.

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