Motor fuel tax stalls in a year of few bills

In a year when lawmakers could agree on little, a proposal to triple the state’s motor fuel tax stands out.

Legislators from both parties said the tax might be needed to support construction and maintenance of roads, airports, ferries and ports.

But the bill didn’t pass, for a few reasons.

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Lawmakers have passed fewer bills in 2017 than any year in the state’s history, but it seemed that Senate Bill 25 stood one of the best chances of passing.

The bill to increase Alaska’s tax of 8 cents per gallon of gasoline to 16 cents this month and 24 cents in a year was described by some senators as a user fee that would offset the growing cost to maintain roads.

Eagle River Sen. Anna MacKinnon hasn’t endorsed the bill. She noted that those who commute on Glenn Highway from her district would pay more in taxes. She acknowledged that they benefit from state transportation funding.

“We drive a considerable distance on that highway and it costs a whole lot of money to replace that,” MacKinnon said.

The bill became caught in the wider debate over a plan to balance future state budgets. The bill was expected to raise $80 million a year. That’s about 3 percent of the gap between what the state spends and what it raises in taxes, fees and oil royalties.

MacKinnon said the Senate majority ultimately chose to focus on a different bill, Senate Bill 26, a measure would draw money from Permanent Fund earnings to pay for state government.

The Senate and House haven’t agreed on that bill either.

“We did not want to do death by a thousand taxes, by a thousand cuts,” MacKinnon said. “We wanted to take the largest item that could help Alaskans and our economy – and that’s SB 26.”

Along with residents in areas with long commutes, the bill also was opposed by airlines and cargo carriers. They said it would make Anchorage uncompetitive with other airports.

It received strong backing from businesses that depend on the roads being in good condition.

Anchorage Democratic Rep. Matt Claman said he’s disappointed the bill didn’t pass.

“What’s the low-hanging fruit in the revenue picture? Increasing the motor fuel tax I think is probably the lowest-hanging fruit that we could find in Alaska,” Claman said.

Claman attributed the bill’s failure to the Senate. He said House members passed bills that would raise more revenue, including an income tax.

“I think the House was doing everything we could to let the Senate know, and say, ‘Listen, if you go ahead and pass the motor fuel tax, then we’re very receptive to passing that as well,’” Claman said.

Claman said the Republican-led Senate majority hasn’t adjusted to the fact that Alaskans elected an independent governor and a House majority that’s mostly Democrats.

“You look and see why is it legislation isn’t moving through the Senate? And I think maybe at some level, the Senate hasn’t really come to accept that there are changes happening in Alaska that are reflected both in who is our governor and the House majority,” Claman said.

But MacKinnon said Alaskans also have re-elected a Senate majority that’s opposed to taxes. She said it’s the House that isn’t used to governing. She said the House had tried to link bills rather than judging each bill on its own.

“The House has been leveraging individual pieces of legislation, from my perspective, to get their way,” MacKinnon said. “And that is not how policy should be developed. Policy, in my opinion, should be developed based on the facts for any individual piece of legislation, not tied to another piece.”

It’s not clear if the motor fuel tax could be passed in a special session later this year, or if the bill will have to wait until next year.

The Legislature has passed a total of 30 bills this year. The previous low was in 2011, when it passed 39 bills.