Wyoming legislative panel supports fuel tax increase

Pursuit will continue next year at the Wyoming statehouse to enact a fuel tax increase to help cover transportation needs.

The state’s current tax rate of 24 cents per gallon is unchanged since 2013. At that time, the tax rate was increased by 10 cents.

The Owner-Operator Independent Drivers Association believes increasing the fuel tax is the most equitable way for states to generate additional revenue.

The legislative effort marks the third time in as many sessions that legislators will consider the road funding option.

During the 2020 regular session, a bill sought to raise the tax rate on gas and diesel by 3 cents to 27 cents per gallon. The measure also included a provision to adjust the tax rate on the consumer price index.

A year earlier, legislation did not call for an increase in the tax rate but it did allow for indexing every two years.

Third time a charm?

The Joint Revenue Committee met last week to discuss tapping into the existing funding source to support needs for state and local road projects. Specifically, legislators reviewed a proposal to increase the tax on gas and diesel by 9 cents. The tax on alternative fuels would be raised by the same amount.

The Wyoming Department of Transportation reports $135.6 million in unfunded operating expenses. The amount includes $72.3 million in construction and maintenance.

WYDOT Director Luke Reiner told lawmakers those numbers will only continue to rise with inaction.

He added that a 9-cent fuel tax increase would not fix the funding problem but that it would be “very helpful for this department.”

The proposed legislation is estimated to raise $60 million annually for state and local roads, according to information provided by the agency.

Reiner said that he sees the fuel tax increase as a short-term solution. He touted a road user charge program as a long-term solution.

“The RUC will come in time, if it is legislatively approved,” Reiner said.

The panel voted 8-6 to advance the fuel tax increase proposal for further consideration during the regular session that begins Jan. 12.

Road user charge

Another funding option being pursued at the capital would move the state closer to implementing a pay-by-mile system, or road user charge.

The Legislature’s Joint Transportation, Highways and Military Affairs Committee met recently to discuss the funding method.

Advocates say a road use charge program is the future of transportation funding. They cite anticipated growth in people purchasing alternative fuel vehicles, which will cut further into revenue collected via the state’s fuel tax.

Committee members voted 10-2 to move forward with the road user charge option for all vehicles as a long-term mechanism to replace the state’s 24-cent-per-gallon tax collection on fuel purchases.

As written in the bill draft, motorists would pay 2.15 cents per mile traveled on Wyoming roadways. Depending on the size of the truck, professional drivers would pay between 10.32 cents and 14.35 cents per mile.

Over time, the draft states the fuel tax would be indexed to maintain alignment with road usage charges. LL

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