HELENA – Resisting changes that would have again dropped the proposed gas tax and sent less money to counties to pay for road projects, the Montana Senate on Thursday advanced a 4.5-cent-a-gallon increase in the state's tax on gasoline.
The gas tax has been one of the biggest political hot potatoes this legislative session, with Rep. Frank Garner, R-Kalispell, leading the charge with his House Bill 473.
Raising the tax was deemed necessary by some to make up for a lack of funds in the state account that is used to put up a match for federal funds that pay for highway construction, maintenance and repair.
For every $1 the state puts up from the highway fund, the state gets about $7 in federal money. The account has also been used to pay for operations at the Motor Vehicles Division and Highway Patrol, though changes that got initial Senate approval Thursday greatly reduce those programs’ dependency on the highway account.
Since 2011 the agencies that draw money from the highway account – mostly the Department of Transportation, as well as the Department of Justice to a lesser extent – have spent more than the current 27-cent-a-gallon gas tax has brought in.
In 2015, for example, the gas tax generated $294.2 million but the agencies spent $308.5 million. The account was expected to be in the red by July, and at the start of this year the transportation department announced it would delay 30 projects because of a lack of funds. The highway patrol said it would have to lay off 27 troopers.
After the start of the legislative session, Gov. Steve Bullock, a Democrat, announced the state received an unexpected $10 million refund from the federal government for heath care expenses and used that to get highway projects back on schedule.
Earlier this week, amendments to Garner’s House Bill 473 lowered the proposed tax increase from 8 cents to 4.5 cents that would step up to 6 cents by 2023.
“I think it’s a reasonable rate to ask to maintain our roads, to provide safety to our families, to the people that are hauling freight in and out,” said Sen. Duane Ankney, R-Colstrip, who carried the bill in the Senate.
Changes to a related bill impose a new tax on new cars and motor homes worth more than $150,000, dubbed the “Ferrari tax,” and impose a 3 percent fee on all transactions at the motor vehicles division, like renewing a vehicle registration. That money would go to pay for operations of the motor vehicles division, making it not reliant on the gas tax.
Another tweak directs 4 cents of the gas tax to the highway patrol in an effort to solidify funding for troopers.
On the Senate floor Thursday, lawmakers attempted to lower the proposed increase again to 3 cents and give less money to counties for road improvements.
While the initial panic over the gas tax focused on getting enough money to leverage federal funds, cities and counties joined the discussion, saying the amount of money they receive from the tax is inadequate. Yellowstone County, for example, said it got roughly enough money each year to pave 1.5 miles of road.
The failed amendment that would have made the tax just 3 cents would have given $11 million to counties instead of the $28 million in the current bill. It failed with 22 senators voting for it and 28 against.
Another amendment that would have ended the increase after four years failed by a similar margin. Sen. Dave Howard, R-Park City, who brought the amendment, said an audit of the transportation department mandated by the bill may show that the department can operate more efficiently and with less money.
Sen. Dee Brown, R-Hungry Horse, spoke against the tax, saying many Montanans can’t afford it.
“Remember those people who are working back at home, who are working for minimum wage,” she said. “Their car is an old beater that probably gets 8, 10, 12 miles to a gallon of gas. What are we doing to our constituents if we don’t speak up now and say enough is enough on taxes?”
Ankney countered by saying the increase is about $3.78 a month for people who drive 20,000 miles a year.
The bill faces one more vote in the Senate before it goes back to the House. The increase would give the state the highest gas tax of surrounding states, though many of those use other methods to pay for road projects, such as Wyoming, which uses a fee on abandoned mines.