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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."