January 20, 2017

Gas tax increase posed as a solution to failing roads

Mike Mozart


Moderately low gas prices and an increasingly dire budget situation in the state has lawmakers eyeing new sources for revenue.

Gov. Susana Martinez has adamantly opposed any new or increased taxes, but some lawmakers are looking to grab several more cents from drivers at the gas pump.

At least two state senators and one Albuquerque city councilor have introduced legislation to increase gas taxes to help pay for road repairs and infrastructure. The move appears to be a trend in several other states.

New Mexico state Sen. John Arthur Smith, D-Deming, chairs the Senate Finance Committee and is considered one of the most fiscally conservative Democrats in Santa Fe. Smith said he plans to file a bill to increase the existing state gas tax by 10 cents per gallon. Half of the money would go to local governments and half would first build state reserves, then fund state roads.

Smith acknowledged that it’s easy for elected officials to scoff at raising taxes, but added that this attitude is not doing the general public any favors.

“They want to do what is popular,” Smith told NM Political Report. “They don’t always want to do what is responsible.”

New Mexico hasn’t raised its gas tax for more than 20 years, and Smith said the value of the dollar has dwindled to about half of what it was worth then.

“We’re still trying to build roads and maintain local roads on the same amount from 20 years ago,” Smith said.

Smith’s bill would raise the state’s gas tax from 17 cents to about 27 cents per gallon. If put into effect today, the total cost for a gallon of gas in New Mexico would be about $2.50  for non-premium gasoline.

Sen. Clemente Sanchez, D-Grants, prefiled a similar bill to Smith’s.

Their measures add to a growing nationwide trend of user fees or taxes funding roads, according to Council of State Governments Director of Transportation and Infrastructure Policy Sean Slone. Fees such as tolls are not new to larger cities, but Slone said some areas across the U.S. are looking into special fees in motor vehicle departments and even hotels and motels to go toward improving roads.

“Many states continue to find gas taxes to be a reliable source of revenue for transportation,” Slone said.

The rise in more fuel-efficient vehicles and a declining dependence on gasoline may reduce revenues from gas taxes. But, Slone said, gas taxes are a reliable source of income in the short term.

A number of Republican-leaning states have already increased gas taxes.

In 2015, the conservative-leaning Nebraska legislature overrode a veto by the state’s Republican governor, resulting in the passage of a 6 cent gas tax increase.

The same year, Utah’s legislature passed a Republican-sponsored gas tax increase of about 5 cents per gallon that allows adjustments for future inflation, with a caveat that the adjusted tax has a minimum and maximum limit.

Smith called his bill the “Utah plan” and said it would include a cap of 41 cents per gallon.

Paul Gessing, President of the New Mexico-based free market research institute Rio Grande Foundation, told NM Political Report his group is opposed to raising the gas tax, but not just because it’s a tax increase.

Gessing said the state should focus on lowering the cost of road construction and repairs before increasing taxes.

But, Gessing said, gas taxes are generally akin to user fees which are “better from a free market perspective than other taxes.”

“We’re not in the boat of ‘taxation is theft,’” Gessing said.

Albuquerque City Councilor Isaac Benton, a Democrat, views gas taxes as a way to hold drivers  accountable for normal wear and tear on roads.

“At least this is a direct correlation to the user,” Benton said.

Benton recently introduced a measure that would add a 2 cent per gallon gas tax in Albuquerque. While Benton already filed his bill, it will likely not be heard until after the state legislative session adjourns in March.

Since two other Albuquerque city councilors are running for mayor and two are running for re-election, Smith’s analysis of popularity versus responsibility may also play out in Albuquerque.

Responsible or not, Gov. Martinez is unlikely to sign a gas tax increase. Martinez’s office did not respond to an email by NM Political Report, but told another news outlet that she didn’t think it was fair to make New Mexicans pay more to fund road repairs.