Lawmakers have taken a step towards doubling Alaska’s lowest-in-the-nation gas tax. State officials say doubling the state levy to 16 cents at the pump would raise more than $33 million a year.
House Bill 104 — co-sponsored by Democratic Reps. Jonathan Kreiss-Tomkins of Sitka and Grier Hopkins of Fairbanks — cleared the House Transportation Committee on Tuesday. It now heads to the finance committee.
“The bill fundamentally doubles what is a very small tax, set in 1970,” said the bill’s primary sponsor, Anchorage Democratic Rep. Andy Josephson.
Most of the revenue would go toward highway maintenance. The bill enjoys wide support from business and industry groups who say it would help reinvest in Alaska’s road infrastructure.
“I think it’s a reasonable fee to pay given the effect of inflation,” Josephson added.
The proposal would also boost a separate surcharge on refined fuel, which is projected to raise about $3.5 million a year for Alaska’s fund to prevent and respond to oil spills.
The state’s Spill Prevention and Response Division has lost 17 positions since 2015. Gov. Mike Dunleavy has proposed cutting an additional five positions in the next budget cycle. The division’s director position is currently vacant.
An environmental watchdog group called the Prince William Sound Regional Citizens Advisory Council, which was formed in the aftermath of the 1989 Exxon Valdez spill, said the division is crucial for the state’s ability to respond to environmental calamities.
“This revenue shortfall diminishes the ability of the state to prevent oil spills and hazardous substance releases, maintain an adequate level of readiness and the ability to respond rapidly, should a spill occur,” the council’s executive director, Donna Schantz, told the committee.
But there was also push-back from commuters who said raising the cost of driving would be unfair. Bert Houghtaling of Big Lake said he’s among tens of thousands who commute between the Mat-Su and Anchorage. He said Alaskans are already hurting due to the COVID-19 pandemic without the price of gas rising further.
“It’s just disproportional and wrong timing for a discussion like this to be happening,” he said.
Mike Coons, president of the Mat-Su chapter of a conservative advocacy group called the Association of Mature American Citizens, said he’s mobilizing opposition to any increase in fuel taxes.
“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.”
His prediction was prescient: House Bill 104 advance out of the transportation committee 4-3 along party lines, with a trio of House Republicans objecting: Reps. Tom McKay, Kevin McCabe and Mike Cronk.
Lawmakers have discussed raising Alaska’s fuel tax for years, and the Senate passed a similar bill last session. But the COVID-19 pandemic meant its companion died in the House leaving sponsors to resume their push this year.
The bill would also raise registration fees by $100 for electric vehicles and $50 for hybrids to help pay for their wear and tear on state highways, since they don’t consume as much fuel. It would also rebate the tax hike on marine fuel for licensed commercial fishing vessels.
Gov. Dunleavy hasn’t indicated where he stands on the fuel tax hike.
“The Governor will consider the bill in its final version if and when it reaches his desk for a signature,” a Dunleavy spokesperson told CoastAlaska on Tuesday.