Motor fuel tax hike passes first committee

ANCHORAGE (AP) - Alaska lawmakers have advanced a bill that would double the state’s motor fuel tax, which has not changed since 1970 and is the lowest in the U.S.

The bill passed in the House Transportation Committee on March 16 and moves next to the House Finance Committee for review. If it can pass the full House, it would go to the Senate, which approved a similar bill last year that failed to win passage in the House.

The bill would double the state’s gas tax to 16 cents per gallon. Most of the $34 million a year in additional revenue would go for highway maintenance. The bill has wide support among the state’s business and industry groups, which argue it would help better maintain Alaska’s roads.

“I think it’s a reasonable fee to pay given the effect of inflation,” said Anchorage Democratic Rep. Andy Josephson, the measure’s primary sponsor.

The national average motor fuel tax is 25.68 cents a gallon, triple Alaska’s current rate of 8 cents a gallon, according to a Jan. 1 report from the American Petroleum Institute. When other fees and sales taxes are added in, the national average is close to 37 cents a gallon.

The bill would also raise an estimated $3.5 million a year to fight and prevent oil spills by increasing the surcharge on refined fuels by about half a penny per gallon. The state’s spill response and prevention account is “woefully underfunded,” Josephson has said.

A couple of Alaskans opposed to the motor fuel tax increase testified at the House Transportation Committee, arguing that the added cost will hurt residents who have been financially hurt by the Coronavirus pandemic.

“It’s just disproportional and wrong timing for a discussion like this to be happening,” Bert Houghtaling, of Big Lake, testified at the transportation committee.

Mike Coons, Mat-Su chapter president of the conservative advocacy group Association of Mature American Citizens, said he is leading opposition to the bill. “Sadly, the leftist House will pass this out with full no-votes by our conservative caucus,” Coons said. “I and others will do all we can to kill this in the Senate.”

The bill would raise registration fees for electric vehicles by $100 and for hybrids by $50. It would also rebate the tax hike for marine fuel used on licensed commercial fishing vessels.