Transportation committee considers gas guzzler tax

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(Host) The House Transportation committee is considering a tax on gas guzzlers as part of its package to raise $25 million to match new federal highway funds.

It’s likely that the package will include other transportation related tax and fee increases.

VPR’s Bob Kinzel reports:

(Kinzel) The House Transportation Committee has a dilemma. It wants to take full advantage of new federal transportation funds but it must raise $25 million in matching state funds to do this.

Governor Jim Douglas has proposed raising $10 million in new transportation fees and he wants to transfer nearly $15 million from the Education Fund to the Transportation Fund.

He argues this makes sense because the money is raised through the state’s purchase and use tax and belongs in the Transportation Fund.

This plan is being strongly opposed by many local officials. Susan Spaulding is the Town Manager in Chester.

She says the governor’s plan is a raid on the Education Fund and confirms a fear that many local officials had when Vermont adopted a statewide property tax for education.

(Spaulding) “All our local governments were very concerned because they felt that if the Legislature got a hold the property tax that it could be expanded without local control and without really touching the people. I have to stand in front of them and hand them their tax bill.”

(Kinzel) House Transportation Chairman Richard Westman says he’s fully aware of these concerns and he feels it’s essential for his panel to recommend ways to replace the money that’s being transferred from the Education Fund.

One idea is a surcharge based on a vehicle’s gasoline consumption. Those that get less than 19 miles per gallon would be assessed an additional $100 when they’re sold. Cars above 40 miles per gallon would be exempt.

(Westman) “It could be part of a package. We’re not going to dismiss anything out of hand. We’re going to look at every single revenue source because we have to. And we have very limited tools to look at. We have a purchase and use tax, fuels taxes and a few fees.”

(Kinzel) The Douglas Administration is taking a serious look at the plan. Transportation Secretary Dawn Terrill.

(Terrill) “We’ve been asked to supply data essentially what our gas guzzler tax is so vehicles that are sticker rated to be less fuel efficient, that there’s some discussion about but additional purchase and use tax on that. We’re still assessing. We’ve done some calculations on that. We haven’t formed a position yet.”

(Kinzel) It’s estimated that a gas guzzler tax could raise about $4 million a year. That means if the committee supports it, the panel will still need to find another $10 million in new revenue to complete their package.

It’s possible that the committee will back an increase in the state gas tax to fill this gap. A final decision is expected next week.

For Vermont Public Radio I’m Bob Kinzel in Montpelier.

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