Vt. House debates gasoline tax increase

MONTPELIER, Vt. (AP) -- Vermont's gasoline tax will rise by about 7 cents, to an estimated 33.6 cents per gallon, under legislation advanced by the Vermont House on Wednesday.

Preliminary approval — a final vote is set for Thursday before the bill moves to the Senate — came as the House approved about $226 million in state funding that, with federal matching funds, will mean about $653 million in spending in Vermont on everything from roads and bridges to airports and railroads in fiscal 2014, which begins July 1.

The gasoline tax increases came over the objections of some lawmakers who said more than 13,000 constituents had signed petitions urging against them.

"I don't believe I recall a year when I have received so many communications from my constituents saying 'don't raise my taxes," said Rep. Thomas Koch, a Barre Town Republican who ended up voting to support the bill.

Supporters said Vermont's roads and bridges need a lot of work, and that the request for new revenues was reasonable.

"I'd rather fix the roads than see them get any worse and fix my car instead," said Rep. Sam Young, D-Glover.

Rep. Patrick Brennan, R-Colchester and chairman of the House Transportation Committee, took the lead in describing and defending the bill to his colleagues. He and other supporters argued the state needed the additional revenue to match federal grants; they said failure to generate the state revenue would mean passing up $56 million in transportation aid from Washington.

Vermont's gasoline taxes are a complex hybrid of sales taxes that are influenced by prices at the pump and per-gallon fees that are based on the volume of gasoline sold.

Gov. Peter Shumlin, who supports increasing the gas tax, has argued the increase was needed because less gasoline is being sold in Vermont — a decline of about 36 million gallons from a peak of roughly 360 million gallons in 2005. People are driving less and in more fuel-efficient vehicles, but they still need well maintained roads and bridges, the governor has argued.

Supporters of relying less on a per-gallon tax and more on a sales tax based on the dollars spent on gasoline argue that the sales tax will hold up better as a source of revenue because gasoline prices are increasing even as sales decline.

The 33.6 cents-per gallon estimate for 2015 is based partly on a forecast of sales of gasoline. It would be made up of a 13.1 cents-per-gallon excise tax as of 2015, down from the current 19 cents. The per-gallon tax then would be adjusted each year following the consumer price index. That drew the ire of some lawmakers, who urged that they should be forced to vote for any increases in the future.

In addition to the per-gallon tax, Vermont would levy the sales tax, with the result equivalent to an estimated 33.6 cents per gallon in 2015. The federal government levies a gasoline tax of 18.4 cents per gallon, meaning that more than 50 cents of the price per gallon at the pump would go to taxes.

The House vote followed the defeat of several amendments, including one that would have ended the state's $7 million annual subsidy for Amtrak passenger rail service.