Local gasoline tax eyed as fix to transportation needs

An attendant tops up petrol for a vehicle at a gas station in Taipei March 1, 2011. REUTERS/Pichi Chuang
REUTERS/Pichi Chuang


Gasoline taxes imposed by Congress and the state haven’t been raised since 1994, leaving cities across Montana struggling to cover the growing cost of maintaining their transportation infrastructure, Missoula’s transportation planning manager said Wednesday.

The City Council’s Public Works Committee began discussing a potential gasoline tax of 2 cents per gallon at Wednesday’s informational meeting. Such a move is permitted under a 1979 state law and would require support from the Missoula County Board of Commissioners.

“Our general transportation funding picture is not very rosy at this point in time,” said Jessica Morriss, the city’s transportation planning manager. “Our federal funding is insufficient.”

Like other cities, Missoula relies heavily upon the federal Highway Trust Fund. But the fund hasn’t been solvent since 2008 and Congress has not raised federal fuel taxes since 1994, leaving them locked at 18.4 cents per gallon.

Morris said the state hasn’t raised its fuel tax of 27.75 cents a gallon since 1994.

“MDT has indicated they’re projecting a $25 million shortfall this year in their budget,” Morris said. “The current total gas taxes you pay here are going to federal gas taxes, which are insolvent. The state gas tax isn’t getting as much revenue as it has in the past.”

Circa 1994 funding levels provided by state and federal sources have left local governments struggling to cover the modern costs of transportation upkeep. As it currently stands, Morriss said, the city must rely on its own revenue sources to cover costs, including local property taxes, impact fees paid by developers, and special improvement districts.

While a local option fuel tax could introduce a new revenue source to help with local transportation needs, implementing it has been a tough sell in the past. Missoula attempted to do so in 1994 and again in 2012. The first effort was defeated by voters while the second was defeated by county commissioners.

“Since 1979, no local county in Montana has implemented this,” said Morriss. “The city of Billings and Bozeman have been talking about this, but neither of those cities have support from their county commissioners.”

Glacier and Custer counties have tried as well, Morriss said.

Wednesday’s discussion follows on the heals of a November survey sponsored by the Metropolitan Planning Organization.

The survey found that 48 percent of Missoula County respondents would support paying more in taxes or fees on transportation improvements. When given a choice in what type of fee they’d prefer, more than 40 percent chose a 2-cent gasoline tax.

While a local fuel tax could generate roughly $630,000 annually, members of the committee weren’t sold on the idea.

“The only way I’d support a gas tax is if you knocked something off our city taxes,” said Ward 4 council member Jon Wilkins. “A lot of us hardly have our nose above water with the taxes that have been put on us this past year, and the county is starting to feel the same way.”

Ward 6 council member Marilyn Marler, who supports a 2-cent gasoline tax, urged committee members to keep an open mind.

“I’m trying to look at this as a longer-term approach to diversifying where our revenues come from,” Marler said. “So far, all we can do is keep taxing property owners, and if we don’t try something different, it will continue to be the only way we can get revenue.”

If a local option fuel tax were implemented, Morriss said, it must be capped at 2 cents per gallon, and it must be applied countywide. It can only be applied to gasoline and does not apply to diesel or other special fuels, she said.

“The way the current law is written says the tax must be collected by the retailer, and when we say the retailer, we mean the gas station,” she said. “The law allows for the revenue to be split based upon population, road miles or some other split the jurisdictions (city and county) agree to.”

The committee took no action on the proposal.