Wyoming fuel tax increase is necessary

Dear Neighbors,

As most of you know, the Wyoming State Legislature is in session and we have some difficult issues. The House has just passed on third reading the 10 cent increase in fuel tax. I was an “aye” vote, which, considering my usual conservative stance on taxes may surprise you. I think it’s fair to say that the tax appeared to have an equal amount of support as well as opposition, especially the Ag groups, they were anywhere from adamantly in favor to likewise opposed to divided down the middle. Let me explain as briefly as possible why I supported this legislation.

Over 50 percent of the fuel sold in Wyoming goes to out of state road users. We collect 10 cents less than any bordering states. I want to single out two important reasons why we are actually paying this tax by donating 10 cents/gallon to other states that have the higher fuel tax. Both reasons have to do with the way fuel tax is applied and collected. While I discuss this keep in mind, Wyoming has a 14 cents/gallon fuel tax while our bordering neighbors average almost 25 cents.

First, I’ll talk about over the road trucking and how IFTA (International Fuel Tax Agency) rules allow truckers to use Wyoming highways and receive 10 cents in credits that they are able to refund in states that have higher fuel taxes. Truckers pay fuel taxes based on the miles driven in each state. If they travel the full length of I-80 in Wyoming they pay on 409 miles, regardless of where they purchase fuel. As they travel east to west they will end up paying taxes according to the number of miles traveled in each state. These truckers will keep track of miles and IFTA will issue what amounts to a 10 cent credit for 409 Wyoming miles that can be applied in states that have higher fuel taxes. I’ll use California as an example, their fuel tax is 40 cents/gallon, the trucker may apply the Wyoming fuel tax credit to use California highways and reduce their tax by 10 cents to 30 cents/gallon. This shift of 10 cents essentially gives away tax that should be used to fix Wyoming roads to California for their road repair.

The other significant factor involves how wholesalers collect tax. About 80 percent of the fuel purchased in Wyoming is bought from out of state wholesalers. Wholesalers collect the tax, required by each state. So they buy fuel and collect 14 cents/gallon using the 10 cents we don’t tax for their own marketing benefit.

Our fuel tax needs to be comparable to our bordering states or we give away our share of the fuel tax. We also put our fuel dealers and retailers at a marketing disadvantage.

When I campaigned this year I promised to listen, study and give careful consideration to legislation, and do what I believe is best for Wyoming. We have funded our highways using General Fund money for many years, if we continue to do this we’ll have to give up other services. I hear from constituents regularly, wanting at least continued funding for senior centers, disabilities, rural health care, and the list seems endless. The roads are vital to Wyoming and must be a priority; we no longer have hundreds of million dollar surpluses. I have not heard of an option that is fairer than this “user fee”, especially in collecting tax on out of state road users.

I hope this brief explanation will help you understand my reasoning for supporting the fuel tax. It’s a great honor serving you.

Sincerely,

John Eklund