Officials: Fuel tax increase likely next year

COEUR d'ALENE - With support from the region's chambers of commerce and legislators, it is a good bet that one way or another it will be more expensive to operate a motor vehicle by next year.

"Last year there was a lot of discussion in the Legislature about the needs of transportation," said Scott Stokes, chief engineer for the Idaho Transportation Department. "This year there will be a better attempt to do it right."

Stokes was addressing members of the Idaho Chamber Alliance Thursday at the Best Western Coeur d'Alene Inn during their annual North Idaho Legislative Summit. The summit is part of the preparations for providing the Legislature with the top items of concern among the chambers prior to the 2009 session.

Stokes said Gov. Butch Otter's attempt last year to increase vehicle registration fees to $150 was too much of a shock to legislators and the public to go through. But with increased use of state highways in the country's fastest growing state, another $240 million per year will needed to keep up with maintenance, replacement and the effect of inflation on those costs.

Faced with a possible loss of 30 percent of federal highway funds in 2009, the department has looked at ways to improve efficiency, and found savings of $50 million over the next five years. Cities and counties will also have to find ways to keep up with their needs, Stokes said.

"There are a lot of local roads in our system," he said. "There is no way the state can function without local roads."

Idaho Sen. Shawn Keough, R-Sandpoint, vice chairwoman of the Transportation Committee, said legislators will need to communicate with the public, already frustrated with fuel prices unprecedented in the U.S.

"I heard a lady yelling at a gas pump," during one of her regular refueling stops, Keough said. "She just let loose with all sorts of language … ."

Though citizens will be angry with tax increases, it's a dilemma the Legislature will have to deal with, and increases in fuel tax and registration fees are the most likely means to meet the demands of the transportation system, Keough said.

"The registration fee is your ticket to the system," she said. "Gas taxes are your fees per mile."

She said another change that could help adjust for inflation is a sales tax on fuel. State fuel taxes have not been increased since 1996, and federal taxes since 1993, so even with gasoline several times the price it was then, the amount per gallon remains the same.

Other states already have higher taxes and registration fees than Idaho, Keough said.

Jonathan Coe, president and general manager of the Coeur d'Alene Area Chamber of Commerce, said chambers have supported the increases.

"We need to increase transportation funding," he said. "Our infrastructure is so critical."

Sen. John Goedde, R-Coeur d'Alene, agrees.

"It's going to have to be a little bit here, a little bit there," he said. "It's not just about the economy, it's about the safety of Idaho citizens."