Gas tax divides local reps
The proposal is now before the state Senate, after winning passage in the state House of Representatives last week. Manchester's representatives divided over the issue, casting opposing votes on the proposed measure that would hike the state's take from gasoline sales.
Cynthia Browning, one of the state representatives for the Bennington-4 District, which includes Manchester, Arlington, Sandgate and most of Sunderland, said that the gas tax will be used in the short-run to match federal funds and in the long-run to find more revenue to fund transportation. "The justification given is twofold," said Browning. "In the short run we need to have money to match Federal Transportation Funds. In the long run we need to find more revenue to fund transportation because the current gasoline tax is applied as cents per gallon, so revenue does not go up when the price of gas goes up."
Since gas prices have been higher in recent years, people have been driving less and buying more fuel efficient cars. As a result, the cents per gallon tax brings in less revenue, she said.
The current gas tax is at 19 cents per gallon. Under the new gas tax, that number would be lowered to 13 cents per gallon but indexed to inflation along with a 4 percent sales tax on the price per gallon.
"Right when gas prices rise, putting pressure on working Vermonters' budgets, the gas tax will rise in dollar terms, although the total increase is capped," Browning said. "When inflation increases, putting additional pressure on our budgets, the cents per gallon tax will increase as well."
Using a gas price of $4 per gallon, Browning said she anticipates a net effect of going from a tax of 19 cents per gallon to 29 cents per gallon, which could go higher. A person buying 50 gallons of gas a week would be paying $260 in increased taxes for the year, she added.
Browning was one of the 37 who voted against the proposed gas tax. She said she worked with other legislators to amend the legislation. However all the amendments put forward failed, and she ultimately was not in favor of the new gas tax.
"As gas prices and inflation rise their dollar amount will increase automatically, without further votes by the legislature. This is not the way to do transparent and accountable tax policy," she said. The argument in favor of these increases is also undermined by the fact that revenue has been systematically diverted from the Transportation Fund for other uses in State government for years, which contributes to the transportation fund's present shortfall, she said.
Jeff Wilson, a state representative for the Bennington-4 District along with Browning, said that the Transportation Committee did most of the leg work on the gas tax and passed it with a 10-0 vote. It then went in front of the Ways and Means Committee, of which Wilson is a member, where it passed with a 10-1 vote. It was then voted on and passed by the entire House by a margin of 105-37, and is now in the hands of the Senate.
The proposal is set to raise about $36.5 million in new revenues from the gas sales tax, without which the state will lose about $56 million in federal matching funds. It's also intended to address volatile gas prices and declining gas consumption by providing a blended revenue source, according to a study conducted by the state's Joint Fiscal Office.
Overall, Vermonters will see a 7.5 cent increase in gas taxes, by 2014, with the first phase of the tax coming in May. There's a minimum floor, so that Vermonters will never pay less than 13.4 cents of gas taxes, even if gas prices go below $3.88 a gallon, and a maximum ceiling, so people won't pay more than 19 cents per gallon, even if prices rise to $5.30 a gallon.
Wilson said he voted in favor of the legislation containing the gas tax in part because Vermont's roads and bridges are in less than ideal condition and if something is not done now, they will only get worse.
"People are driving less. People have more efficient cars. I think it's something like 36 million gallons less of gas being sold annual in Vermont then it was 10 years ago and it just doesn't generate the revenue we need to keep our bridges and roads up to par," he said.
"Nobody likes to pay more taxes. Most folks I have talked to support it because they recognize that our roads are not in great shape and if we don't do anything to raise revenue to pay for maintenance it will only get worse," he added.
Wilson said that he believes this will only be a short term solution of funding transportation and that it might not work for the long term.
"I think people recognize that the gas tax is not going to be the ultimate solution of funding highways, but at this point in time we still have to continue to use the gas tax as a revenue source," he said.
For local gas station owner Steve Burzon, owner of Garden Arts Fresh Market, said that he is more worried about the well-being of regular people trying to make a living than his own business.
"I think I am going to get people buying gas regardless of the price," he said. "What worries me is that my employees and other low income residents and families are going to have a hard time. People who don't make as much money already have a hard time with the price of gas digging into their wallets and I think the gas tax will only make that worse."
Burzon said that he is not in favor of the gas tax for that reason, that it effects lower income families more than it does people who have more money to spend and that he thinks that other means of finding money should be used to fund transportation, at least for the time being.
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