15-cent fuel tax increase to be considered by Legislature

SHERIDAN —With a 9-2 vote Tuesday, the Wyoming Legislature’s Transportation, Highways and Military Affairs Committee opted to forward a bill that would raise the state’s fuel tax for the first time in a decade.

The bill suggests a 15-cent fuel tax increase from 24 cents to 39 cents by July 1, 2024. The fuel tax would be increased by 5 cents per year for three consecutive years.

All funds raised through the increase would go to the Wyoming Department of Transportation, particularly for highway construction, repair and maintenance. The bill stipulates the dollars cannot be spent on operating or administrative expenses for WYDOT.

The fuel tax was last raised in 2013, when it was increased by 10 cents, according to Katie Legerski, executive director of the Associated General Contractors of Wyoming. Currently, Wyoming has lower fuel taxes than every surrounding state, with the exception of Colorado, which is at 22 cents per gallon.

The bill is just part of the transportation committee’s multifaceted approach to attacking the Wyoming Department of Transportation’s funding deficit. Just a day earlier, the committee voted to forward a bill allocating a portion of the state’s severance taxes to WYDOT as well.

WYDOT is currently funded primarily through federal money, fuel tax revenues and other fees. According to estimates provided last year, WYDOT was facing a funding shortfall of $354 million a year, including $103 million less than what is needed to preserve the state’s roads and bridges.

While the recently passed federal Infrastructure Investment and Jobs Act bill looks to bring an extra $113.34 million to WYDOT each year, including $93.06 million for the preservation of roads and bridges, the department is still facing a yearly shortfall of roughly $245.44 million, according to WYDOT Director Luke Reiner.

The fuel tax increase could go a long way toward filling that gap, according to committee co-chair Rep. Donald Burkhart, R-Rawlins. Each 1 cent increase in the fuel tax means an additional $4.2 million in revenue that can go to WYDOT.

Prior to the bill’s approval, there was some discussion about how large the fuel tax increase should be. 

Burkhart initially argued a 6-cent increase — where the fuel tax would be increased by 2 cents per year for three consecutive years — could be easier to sell to the Legislature this spring than the 15-cent increase.

“While I think 5 cents (per year) is a more realistic number that is needed…I think 2 cents over three years is an easier number to potentially pass,” Burkhart said.

However, committee co-chair Sen. Bill Landen, R-Casper, argued 6 cents wasn’t adequate to address WYDOT’s funding needs.

“It’s important to remember that we only get to go to this well about once a decade,” Landen said. “That’s kind of the history of things, and it is a fight, and it should be a fight… But we’ve hopefully hit home with the fact that we’ve got an infrastructure system that is running close to the edge of a cliff, and we have to do something…The two cents (a year) is going to be just as big a fight (as the 5 cents) but it’s not going to get us where we need to go.”

Sen. Jim Anderson, R-Casper, agreed and encouraged the body to pursue an amount that could actually address the agency’s funding deficit.

“I would suggest it’s going to be difficult to get this through, just as it was in 2013,” Anderson said. “Whether it’s 5 cents or 2 cents (a year), the no-new-taxes guys are going to vote against it … So we might as well go for what makes a difference to the highway department in getting this done.”