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Governor unveils transportation funding request

Gov. C.L. “Butch” Otter last week outlined an austere budget that reflects the declining national economy and Idaho’s constitutional mandate to operate with a balanced budget.

In addition to the reductions he requested, the governor’s budget message also included his vision for addressing the backlog of transportation needs. He recommended incremental increases in the Idaho fuel tax, vehicle registration costs and introduced the concept of a new tax on automobile rentals.

Gov. Otter, his staff and the Idaho Transportation Board conducted an extensive series of meetings last summer to emphasize the need for additional transportation funding and to receive suggestions from Idaho constituents in every region of the state.

His recommendations to the Idaho Legislature on its first day of the 2009 session, Jan. 12, were a result of the public meetings. Specifically, Gov. Otter asked Legislators to consider:

Increasing the Idaho fuel tax by 2 cents per gallon in each of the next five years, which would move the state fuel tax from its current 25 per gallon to 35 cents. It would be the first increase in state fuel taxes since 1996.

“That will bring in about $17.6 million in additional fuel tax revenue the first year. And after five years it will generate a total of about $88 million a year extra for transportation,” Otter said. “To put that into perspective, we raised the fuel tax to 25 cents 13 years ago. And now here we are trying to accomplish 2009 goals with 1996 dollars…”

Increasing vehicle registration fees “in a way that updates our system while continuing to take the age of vehicles into account.” His plan would raise about $15 million in new revenue from registration fees the first year. “After five years, the registration changes I’m proposing will generate about $51 million a year in additional revenue.

Approving a 6 percent excise tax on car rentals, eliminate the ethanol exemption from the fuel tax and shift the 5 percent Idaho State Police receives from the fuel tax to the general fund, making an additional $16 million available to the transportation department annually.

Forming a task force to study the “validity of – and perceived inequities in – Idaho’s truck registration system.”

Gov. Otter also wants to consider a concept discussed by House Transportation Chairman JoAn Wood that would shift the sales tax from some automobile-related products, such as parts and tires, from the general fund to ITD’s budget.

“Determining the size and stability of that particular revenue stream is a necessary step before we can even consider using those sales tax receipts for our highways and bridges,” the governor said.

“My overall plan ultimately will raise more than $174 million a year in new revenue for transportation after five years. Now, I know that’s not the $240 million a year that we all have been talking about. But these are difficult times for many Idahoans. And as I said earlier, it is important that we find ways to do our jobs within their means.”