House committees compete for gas tax revenue

MONTPELIER — The House Transportation Committee is in a holding pattern as it tries to figure out how to deal with declining revenues in a gas tax based on the price of the fuel.

Members discussed various ways to deal with a $6.6 million gap facing the transportation fund Wednesday, including adjusting the Transportation Infrastructure Bond Fund, or TIB, to help bring in more revenue. Committee Chairman Rep. Patrick Brennan, R-Colchester, said the fund, launched in 2009, is bringing in less revenue as prices at the pump fall.

The fund is filled with a 2 percent assessment on the retail price of gasoline and a 3 cent per gallon assessment on diesel fuel. Brennan said those rates worked well when the fund was launched and gasoline was more than $3.80 per gallon. The average price of gasoline per gallon in Vermont is now $2.40.

Rep. Patrick Brennan

Rep. Patrick Brennan

“We’re not doing that well,” Brennan said. “The whole hole we’re facing right here, $6.6 million, is from the TIB.”

The $6.6 million projected shortfall was based on a gasoline price of $2.80 per gallon, however, so the gap is expected to grow.

“I would guess we’ll be up to ($8 million) by the time the next revenue forecast comes out,” Brennan said.

Adjusting the TIB would close the gap, but Brennan said the committee is essentially paralyzed until it is determined how a water quality bill out of the House Fish and Wildlife Committee will be funded. If it is partially funded by a 2 cent per gallon increase in the state’s regular gasoline tax, which typically only funds transportation costs, then the House Transportation Committee will likely scrap any plan to raise revenue through the TIB.

“They’ve got a big water quality bill that the governor has touted and now they’re implementing it and trying to find funding for it to the tune of $14 million,” he said. “They put the 2 cents in there.”

The 2 cent per gallon increase Fish and Wildlife may seek would raise $6.3 million. But that would effectively kill any political will to raise additional funds through the TIB, according to Brennan.

“I’m not raising two gas taxes in the same year,” he said. “There’s no appetite.”

In that case, the Transportation Committee will look to make cuts to transportation projects.

“If that flies, there’s no way we’re even going to talk about it in here,” Brennan told the committee. “These cuts will be real. It will be a fact of life at that point.”

Committee Vice Chairman Rep. David Potter, D-North Clarendon, said the committee will eventually need to address a long-term problem if gas prices remain low.

“The way I see it it’s a festering sore that doesn’t go away. We’re going to do this exercise into the future,” Potter said. “It’s not a popular thing but it’s the right thing to do to maintain our infrastructure.”

Rep. Herb Russell, D-Rutland, said the committee, if it seeks more revenue through the TIB, would be asking Vermonters to pay back a small amount of the savings they’ve seen at the pump.

“Perfect time to sell it. I don’t have any problem with it,” he said.

For now, however, the committee plans to wait and see if the water quality bill will seek funding through the gas tax.

“I think we’re in a wait and see mode,” said Rep. Timothy Corcoran II, D-Bennington, the committees ranking member. “We’ve got to see how it plays out.”

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