Gas tax drop puts pothole in road budgets

Inflation-stretched state highway funds are receiving a lot of attention in legislatures across America. Within recent weeks at least five states -- Idaho, Kentucky, Massachusetts, South Dakota, and Utah -- have increased their gasoline taxes to raise money for highway maintenance.

Similar moves are afoot elsewhere in more than two dozen legislatures from Florida to Alaska.

It is increasingly uncertain, however, how much additional help may be on the way in 1981 since several legislative sessions have already wound up for the year and a number of others are in their final days or weeks.

While rising road-construction and upkeep costs are the major cause of shrinking highway funds, gasoline conservation has contributed to the situation with reduced driving (and cars that get better mileage) resulting in less motor fuel used and conequently slimmer tax receipts.

Thus far, more than 60 proposals to boost motor fuel levies have been under consideration in all but four states.

Two-thirds of the measures are still pending, including ones in Arizona, Missouri, Montana, and Tennessee, which have made it through either the state senate or house.

In Missouri, for example, two different gas-tax hike bills are in the works. The state Senate has approved a flat 2 cents a gallon increase, effective July 1 . Similarly, the House would boost that levy from 7 cents a gallon to 9 this year, but would also add another penny a gallon in mid-1982.

Vermont lawmakers have been split on whether to raise the motor fuels tax from the current 9 cents a gallon or to tie the levy to a percentage of the retail price, a solution favored by Gov. Richard A. Snelling.

The Vermont House has passed a flat 2 cent boost, which would produce only about half the additional $70 million sought by the state's chief executive. Alternatives under Senate consideration include shifting the costs of state troopers and registry of motor vehicle personnel from the state highway fund to the general fund. The general fund would be boosted by expansion of the state's 3 percent sales tax to cover motor fuels.

Arizona, Missouri, Vermont, and Tennessee are among the 22 states that have not raised motor fuels levies in the past six years.

Since January 1978, 23 states have increased their gasoline taxes once and several, including those tying their levies to wholesale or retail motor fuel prices, more than once.

The recent hikes in both Kentucky and Massachusetts, for example, resulted from such administrative adjustments rather than direct lawmaker action. The Massachusetts tax, which prior to April 1 had been 9.8 cents a gallon, now is 11 .5 cents a gallon. The Kentucky increase was from 9 to 9.5 cents a gallon.

Two of the nation's three newly enacted gas tax laws -- those in Idaho and Utah -- involve 2 cent-a-gallon boosts, effective July 1.

The penny increase in South Dakota, on the other hand, began on April 1. It is also perhaps the most controversial since a portion of the additional revenue is earmarked not for highways but for running a newly acquired state freight railroad.

A suit challenging the diversion of gasoline tax revenues for nonhighway-related purposes has been brought before the state's supreme court by the South Dakota Auto Club, a division of the American Automobile Association.

The tax hike from 12 to 13 cents a gallon is projected to net $5.2 million a year in new revenue, some $2.7 million of which would go toward operating the rail freight line. The latter is for the shipment of grain, South Dakota's main agricultural product. State officials contend that without the rail system highways would have to be used to haul grain resulting in higher transportation costs and a faster wearing out of roads.

A three-year temporary increase in the state's sales tax has financed the purchase of abandoned rail rights of way.

At 13 cents a gallon, South Dakota now has the second highest levy of this type in the nation, exceeded only by 13.6 percent in neighboring Nebraska where the rate is pegged to a percentage of the wholesale motor fuel price.

Idaho's tax increase will bring the levy from 9.5 to 11.5 cents a gallon and net an estimated $8.7 million in additional highway funds during the first year. This, according to state transportation department officials, is only about one-fifth of what is needed and less than the $16 million sought by Gov. John V. Evans.

The Utah gas tax increase from 9 cents to 11 cents a gallon is projected to yield an additional $15 million for the highway fund. Revenue during the 12 months ending June 30 is running some $9 million short of what had been anticipated last July.