Louisiana legislators review road funding plans
May 13, 2021
Raising revenue for transportation purposes has proven to be elusive in recent years at the Louisiana statehouse.
Annual efforts in the Legislature to increase the state’s 20-cent fuel tax rate continue to fall short. The latest effort backed by Rep. Jack McFarland, R-Jonesboro, called for more than doubling the tax rate to 42 cents over 12 years.
The provision has since been dropped from HB582. The revised bill’s primary focus on raising revenue would come from fees on electric and hybrid vehicles.
Electric vehicle owners would be responsible for paying a one-time $1,000 road-use fee. Hybrid vehicle owners would pay $500.
Existing revenue source could be tapped
Other methods to raise revenue continue to receive consideration in both state legislative chambers.
McFarland is behind another bill to tap existing revenue to benefit transportation work.
HB511 calls for vehicle sales tax revenue to be diverted from the state’s general fund to a transportation fund dedicated to road and bridge work. The shift would take place over the next decade.
Diversions would be made in 10% increments annually through fiscal year 2031. According to estimates, the change would bolster the state’s Transportation Trust Fund by nearly $750 million over the first five years.
House lawmakers voted 69-29 to advance the bill. HB511 awaits further consideration in the Senate Finance Committee.
Sales tax revenue for roads
A separate bill on the Senate floor would also tap an existing revenue source to aid road and bridge work.
In place since 2018, a 0.45-cent temporary sales tax is collected by the state to boost funding for needs that include education and healthcare. The tax, which was approved to aid state government during a budget crisis, has a 2025 sunset date.
Sen. Barrow Peacock, R-Bossier City, is the sponsor of a bill to shift more than $800 million from the temporary sales tax to the Transportation Trust Fund.
SB1 would earmark $168 million in 2022, $294 million in 2023, and $387 million in 2024.
A provision in the bill specifies the tax revenue must be used for transportation work. Additionally, half of the money would be divvied up among the state’s nine transportation districts.
Temporary road funding
A related bill on the House floor covers revenue from the 0.45-cent temporary sales tax.
HB693 would extend the collection of the tax from 2025 to 2031. A portion of the revenue also would be used to fund infrastructure work.
At a recent hearing, Sen. Rick Ward, R-Port Allen, said a creative approach is needed to add revenue for transportation.
Critics say the sales tax was touted as a two-year stop-gap to get the state through a tough economic time. Opponents add that an extension approved two years later, and the proposed six-year extension would be one more step toward a permanent tax.
A little extra for transportation
One more road funding bill, HB514, would impose a sales tax on raw or crude marijuana recommended for therapeutic use. Half of the revenue from the 4.45% tax would be sent to a construction subfund in the state’s Transportation Trust Fund.
A fiscal note attached to the bill shows the tax is estimated to raise $12 million annually by fiscal year 2026. Half of that amount would be applied for transportation purposes.
HB514 awaits consideration on the Senate floor. If approved there, the bill would head back to the House for approval of changes before it can move to the governor.
Passage of HB514 is contingent on enactment of a separate bill, HB391, to legalize the activity. LL
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