Idaho fuel tax revenue slips for first time in six years
By JOHN MILLER
Associated Press
Wednesday, August 6, 2008 9:57 AM PDT
BOISE — For the first time in six years, Idaho fuel tax revenue has declined as drivers faced with $4 per gallon gasoline shunned their cars and as fuel distributors blended tax-exempt ethanol to meet federal mandates.
The $5 million drop in fuel tax revenue in fiscal year 2008, which ended June 30, comes at an inopportune time: Gov. C.L. ‘‘Butch’’ Otter is trying to raise additional cash to fill a $240 million annual transportation funding shortfall. From 2003 to 2007, revenue from Idaho taxes on gasoline and diesel fuel rose more than 10 percent, to $234.8 million in fiscal 2007, helped by population growth. In fiscal 2008, however, revenue slipped 2 percent, to $229.6 million. Drivers are increasingly hopping on public transportation, buying fuel-efficient cars such as hybrids or employing other strategies to reduce consumption as gas prices increase — a trend some say has encroached deep into Idaho’s four-wheel-drive-loving agricultural heartland where gigantic pickups have long been a mainstay on the roads.
‘‘I even spotted a hybrid in Soda Springs,’’ said Suzanne Schaefer, a lobbyist for the Idaho Petroleum Marketers & Convenience Store Association. Another significant but less-obvious reason for slumping fuel tax revenue is that fuel distributors that supply Idaho service stations have increased their ethanol blending, at least in part to meet a 2007 congressional mandate to blend 9 billion gallons of ethanol into the U.S. fuel supply this year. Ethanol is exempt from Idaho’s 25-cent-per-gallon gas tax, a longtime incentive to spur the industry’s growth. Last year, 33 million gallons of gasohol — gasoline mixed with 10 percent ethanol — were sold in Idaho, out of a total of more than 655 million gallons. In the first four months of 2008, 44 million gallons of gasohol were sold. If the trend continues, more than a sixth of all gas in Idaho this calendar year would contain ethanol, meaning the state would lose out on $3.3 million. Otter aides said the volatility of revenue from Idaho’s gas tax is a big reason the governor favors other means of raising money to cover the highway-and-bridge funding shortfall. The latest meeting in Otter’s summer effort to promote additional transportation funding sources was Tuesday in Twin Falls, to discuss alternatives such as boosting registration fees or adding a tax to rental cars.
