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State officials say the gasoline tax is failing to adequately fund roads in an era when hybrid cars use less gas, more drivers use alternative fuels that totally escape the tax, newer vehicles have better gas mileage and people are driving less in a tough economy.
Legislators said Wednesday the problem is becoming critical, and called for a day-long summit later this year where committees on taxation and transportation would jointly invite experts to explore such alteratives as imposing tolls, raising the gas tax, or using more property, sales or utility taxes for roads.
"I think there are multiple options," said Sen. Stuart Adams, R-Layton, a former chairman of the Utah Transportation Commission. "Utah is not the only state with these type of issues," and he said he wants to hear how others may be addressing them.
The issue arose before the Revenue and Taxation Interim Committee when Provo Mayor John Curtis asked lawmakers to allow cities to charge a new property tax just for road maintenance.
Curtis said Provo for years has used laws that allow cities to borrow money through bonding for road maintenance. But the money often was used in just three years, while the city continued to pay for it for 10 years — with little maintenance occurring in the final years of that period.
He said Provo seeks allowing a new property tax for road maintenance to break its borrowing cycle, and to shift the money now going to interest payments to fund roads.
Rep. Merlynn Newbold, R-South Jordan, said cities already may raise property taxes for any purpose. But Curtis said a separate property tax just for roads would be more transparent, and not allow cities to sell a tax increase to residents by promising it would go for roads and then use it in later years for other purposes.
Cities face problems in part, Curtis said, because the state has not raised its 24.5-cent-a-gallon state gasoline tax since 1997, a portion of which goes to cities and counties. Several lawmakers said local and state officials all agree they are facing problems because the gas tax has not kept up with inflation because of more fuel efficient cars and people driving less.
Sen. Howard Stephenson, R-Draper, who also is president of the Utah Taxpayers Association, said it would be wise to look not just at Provo's idea of adding a local property tax for roads, but to look at the entire spectrum of possibilities. The committee passed his motion for a day-long summit with the Transportation Interim Committee.
Members mentioned several possibilities to explore, including raising the gasoline tax; using some tolls; taxing alternative fuels; using proceeds of sales tax on items sold on the Internet for roads; and shifting some utility taxes for roads.
The Legislature last year killed a proposal to raise the gasoline tax by 5 cents a gallon, arguing it would hurt the economy in tough economic times.