Idaho Lawmakers Vote to Hike Fuel Charges, Vehicle Fees for Transportation Upgrades

AASHTO Journal, 17 April 2015

Users of Idaho’s highway system will pay 7 cents a gallon more in user fees on motor fuel starting July 1, while annual vehicle registration fees will rise and owners of electric or hybrid cars and light trucks will be assessed a new levy to reflect their use of infrastructure without supporting it through fuel fees.

All of that is under a bill the state Legislature finalized just after midnight April 11, to generate a reported $94 million more a year for transportation improvements. It now goes to Gov. Butch Otter, who is expected to sign it into law.


That is well short of the $262 million in added annual revenue that Brian Ness, director of the Idaho Transportation Department, has said is needed just to maintain existing infrastructure in current conditions. In all, Ness says, the state faces an annual shortfall of $543 million to keep up with road and bridge needs as demand increases.

However, the Idaho House and Senate were unable to bridge differences in their separate bills during the legislative session, and formed a rare conference committee that negotiated the final bill over two days.

And before that panel could begin its work, the conservative national anti-tax group Americans for Tax Reform weighed in with a lengthy critique on its website headlined “ATR Opposes Transportation Tax Hikes in Idaho.”

The final bill includes the motor fuel user fee hike for about two-thirds of its projected revenue, and increases annual vehicle fees for much of the rest. It passed with a 26-9 Senate vote and 51-19 in the House, the Idaho Statesman reported. It now goes to Gov. Butch Otter, who is expected to sign it into law.

Idaho applies the same motor fuel charge of 25 cents a gallon to diesel, biodiesel and ethanol as well as gasoline, so all of those fuels will see a July 1 increase.

The bill adds $21 to most yearly registration fees for light-duty passenger vehicles, plus $25 for trucks and $10 for motorcycles.

It also levies a $140 annual fee on electric vehicles whose operators would not be using motor fuels that are taxed to fund roadway upgrades, and levies a $75 fee for high-mileage hybrids. That puts Idaho among a growing number of states that are adding levies or removing tax breaks for electric and hybrid vehicles, as part of an effort to collect revenue from more users of the road and bridge network.

The legislation also creates a competitive “strategic initiatives program” to fund programs proposed from the ITD’s six districts that will be assessed for their return on investment in safety, mobility, economic opportunity, bridge maintenance and purchases of rights of way.

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