Preventing Subsidization of Utah’s Transportation Infrastructure Maintenance

Your Taxpayers Association has long stood for the principle that users of a service ought to be responsible for the payment to maintain and provide the service. In this circumstance, roads and transportation infrastructure.

When a traditional-fueled vehicle fills their gas tank, the tax on gasoline is automatically calculated into the total price of a gallon of gas. That gasoline tax is then used to pay for the maintenance of both state and local roads.

Electric vehicles do not pay the gasoline tax, and therefore are not contributing their fair share of the usage of the roads. While they do pay a registration fee which does contribute to the transportation infrastructure, it is not nearly to the point of equity with traditional-fueled vehicles.

In the 2021 General Session, Rep. Kay Christofferson sponsored HB 209, which would have required that these types of vehicles are contributing their fair share to the maintenance of the roads. This unnecessarily controversial bill unfortunately did not pass through the Legislature.  

Following this, the Association has been working with legislators and other interested parties throughout the year to find an agreement that would create a better system that charges electric vehicles for their use of the maintenance and operation of the roads.

In November’s Transportation Interim Committee meeting, the first draft of legislation was unveiled and given to the committee for discussion.

Rep. Ray Ward presented his proposal as a result of these meetings throughout the year with the Association, legislators, and other interested parties. The legislation does move towards the direction of electric vehicles paying a more fair portion of their use of the roads, but it does have some pitfalls.

The proposed legislation does increase registration fees up to $240, which was proposed in HB 209, but it does so as the number of electric vehicles on Utah’s roads increases. The bill proposed that registration fees would increase to $240 when the number of electric vehicles on Utah’s roads reaches 10% of the total registered vehicles in Utah. While this is a positive step, data provided from the Utah Department of Transportation shows electric vehicles may not reach the proposed end target for ten years. At this point, the road usage charge program is statutorily required to be fully operational, making the increased registration fee nearly insignificant.

The bill also decreases the fee for those within the road usage charge from 1.5 cents per mile to 0.5 cents a mile, making the road usage charge program run a deficit.

The Taxpayers Association did comment on this proposal, saying that it’s an encouraging first step, but more refinements need to be made to make sure everyone driving is paying a better portion for the maintenance of the roads.

We thank Rep. Ward for his proposal and willingness to work through our concerns, and hope all legislators will see the importance of funding transportation infrastructure more equitably through charging those who do not pay for road usage, and ensuring that usage is more directly tied to fees or taxes charged. 

Continuing Discussions on Tax Policy To Keep Utah In the Lead

During November’s Revenue and Taxation Interim Committee meeting, your Utah Taxpayers Association joined with the Utah Petroleum Association and representatives from the oil and gas exploration industry in eastern Utah to advocate for removing the punitive sales taxes that industry pays on their business inputs. Utah has worked for decades to do the right thing in removing sales taxes from business inputs (to avoid harmful anti-competitive tax pyramiding) for most major industries in Utah.

However, several industries have been left out in the cold, including oil and gas exploration, electrical generation, telecommunications, and software to name a few. Representative Christine Watkins (R- District 69), who represents Carbon, Duchesne, Grand and Emery County is drafting a bill for the 2022 General Session that will remove the state (not local) sales tax burden for the most critical job creating industry in eastern Utah.  While there was not a formal vote of the committee during this informational presentation, we are encouraged by the response and expect progress during the 2022 General Session. 

The proposal keeps local governments whole by only eliminating the state portion of the sales tax and keeps local funding intact. Your Utah Taxpayers Association testified in strong support of the proposal and will continue to advocate for this critical additional next step for Utah jobs and economic stability in eastern Utah.

In addition, Senator Lincoln Fillmore (R – District 10) discussed his bill to provide property tax relief to Utah taxpayers with his bill to allow for property tax deferrals. His previous bill seeking to do the same thing during the 2021 Session was defeated on the House floor due to opposition from several county officials around the state. 

The Taxpayers Association has worked with the Utah Association of Counties over the past many months to address their concerns and they no longer oppose the bill. We spoke in support of the legislation and it was recommended favorably by the committee in a unanimous vote.