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Just before its midnight adjournment, the Legislature passed a compromise plan Thursday to raise and reform gasoline taxes for the first time in 18 years — merging what had been competing proposals by the House and Senate.

The deal includes raising the gas tax by about 5 cents a gallon on Jan. 1, 2016. The Senate earlier sought a 10 cent increase, while the House initially wanted no hike.

The compromise adopts a House proposal to convert the current cents-per-gallon gas tax into a system similar to a sales tax. That allows the tax collected at the pump to increase automatically when gas prices rise.

The deal would impose a 12 percent tax on the wholesale price of gasoline, adjusted once a year.

However, Rep. Johnny Anderson, R-Taylorsville, said the bill is written so that automatic raises are designed not to kick in until the wholesale price of gasoline reaches $2.45 a gallon, which is not projected to happen for six to 10 years.

The deal has a cap to ensure the gas tax does not rise above 40 cents a gallon over time.

The Senate also gave in to what had been a sticking point with the House — allowing counties to ask voters to approve a quarter-cent per dollar sales tax increase to give cities, counties and transit districts more money for local projects.

In urban areas, cities and the Utah Transit Authority would each receive a tenth-cent of the sales tax increase, and counties would receive .05 of a cent.

The Senate also removed proposed increases in car registration fees that the House opposed.

The Senate approved the compromise 20-8, and the House passed it 44-29.

"I love the innovative way we are approaching our future transportation needs," said Senate Transportation Committee Chairman Al Jackson, R-Highland, the Senate sponsor of the bill.

He noted that since the last gas tax increase in 1997, the 24.5-cent-per-gallon levy has lost 40 percent of it original buying power to inflation — so it is essentially worth only 14.7 cents a gallon.

"We are robbing from the general fund and education for transportation needs," he said, arguing highways should be funded more fully by the user-fee gasoline tax.

Also, he said the state has a projected $11.3 billion shortfall in priority transportation projects through 2040.

But Sen. Howard Stephenson, R-Draper, balked at the compromise.

"In a year when we have nearly $800 million surplus, the people are wondering why we are increasing taxes," he said.

Sen. Kevin Van Tassell, R-Vernal, said one reason is that the state in recent years stopped regular maintenance of lesser-used highway in rural areas to afford maintenance in urban areas. He said the tax hike would help again maintain those neglected roads.

"Is this a perfect bill? No," Van Tassell said. "But it is a compromise we can live with." He added that a cap of no more than 40 cents a gallon will prevent the automatic-rise portions of the bill "from becoming a runaway train."

"Now is the time to act," said Sen. Todd Weiler, R-Woods Cross. "I will plug my nose a bit and vote for this bill."

Gov. Gary Herbert has supported the approach taken by the compromise, indicating he is likely to sign it.

"Having a five-cent increase in gasoline tax so we can have some instant infusion of money into our needs for roads is a good thing," he said this week. "Having a sales tax that will grow as we have an expansion in the economy to address our growth pressures is also a good thing."