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Senate strips cities of local option gas tax

February 17, 2012

The local option transportation fee bill (SB 6582) passed the Senate this week with some changes.

Here is a summary of what the House will now consider:

  • Doubles the vehicle fee a TBD can impose without a public vote from $20 to $40 per car.
  • Allows a TBD to charge a Motor Vehicle Excise Tax (MVET) based on the vehicle’s value. The MVET requires a public vote.
  • Restricts a TBD from imposing both a vehicle fee and MVET.
  • Changes the formula on how much gas tax a County can impose to 1, 2 or 3 cents per gallon. The county gas tax requires a public vote.

The most notable change is the Senate removed most of the controversy surrounding the local option gas tax by stripping out the provision that would have granted the authority to cities.

Counties can already charge a gas tax but the new bill also changes how much counties can impose. Current law authorizes counties to charge a gas tax that is 10% of the current state rate. The current state gas tax rate is 37.5 cents per gallon, which means counties may impose 3.75 cents per gallon. SB 6582 simplifies the equation by stating specific amounts that counties may impose, 1, 2 or 3 cents per gallon.

Interestingly, the Senate bill actually reduces the amount of gas tax a county can charge.