Gasoline prices that Alaskans pay at the pump may increase by more than 8 cents per gallon, if a bill under consideration by the Legislature is adopted.
At issue is a plan to double the motor fuel tax the state levies from 8 cents per gallon to a little more than 16 cents per gallon. The bill is headed to the House Finance Committee after a hearing this week in the House Transportation Committee.
The bill would raise an estimate $33 million a year, with most of the revenue going toward highway maintenance. A similar proposal in 2020 stalled in the Legislature.
Alaska currently has the nation’s lowest state motor fuel tax, at 8 cents per gallon. The state gas tax has not changed since 1970, supporters of the tax hike noted. When Alaska’s motor fuel tax was first introduced 75 years ago, it was a penny per gallon.
Commuters who testified Tuesday said the gas tax needs to stay the same. The impact on retirees also was raised as a concern.
“I drive 100 miles per day — 24,000 miles a year,” Mike Coons, president of the Mat-Su chapter of the Association of Mature American Citizens, told the House Transportation Committee.
“The impact on senior citizens, on a fixed income, will be very difficult,” Coons added. “I for one will need to take money from other parts of my (household) budget to cover this increase.”
Coons also noted that in the city of Anchorage, drivers already pay an additional 10 cents per gallon through a municipal excise tax.
Bert Houghtaling of Big Lake also spoke out against the tax. “Now in the middle of a pandemic that people are trying to recover from, you want to raise the fuel tax? It’s the wrong timing to discuss this,” he said. “The impacts on Alaskans need to be considered.”
Houghtaling said he commutes between Mat-Su Valley and Anchorage, like thousands of other drivers. He deliberately does not buy gas in Anchorage to avoid the higher fees.
The committee also heard from advocacy groups and industries, which were supportive.
Joe Michel, executive director of the Alaska Trucking Association, said his organization will support the legislation, if revenues from the tax go “solely to highway maintenance.”
“You need to put some sideboards on this bill,” Michel said.
Brittany Stampohar, representing the Alaska Association of General Contractors, voiced support for the bill, reiterating that tax dollars need to go to improve road infrastructure and maintenance.
Donna Schantz of the Prince William Sound Citizens’ Advisory Council — an environmental watchdog group formed after the Exxon Valdez spill — focused on a proposed increase of less than one cent, in the form of a surcharge, that is tacked onto the bill.
The surcharge would help pay for spill prevention and response on the state’s highways. Alaska’s Spill Prevention and Response Division has lost several positions, due to budget cuts.
She said that the state will not be able to effectively prevent and respond to dangerous spills without the increase, which brings the surcharge to 1.5 cents per gallon for the so-called 470 Fund.
The surcharge, which would raise about $3.5 million annually, is in addition to the 8 cent increase in the gasoline tax.
A total of nine people spoke to committee members about the proposed increases in the gas tax and gas surcharge at the pump.
Rep. Kevin McCabe of Big Lake urged fellow House Transportation Committee members to invite more public testimony before voting to advance the bill out of committee. He worried aloud that many Alaskans do not realize that a gas tax hike is under consideration.
“Let’s give people another chance for public testimony,” McCabe said.
McCabe was advised that the House Finance Committee will take additional public testimony when it next reviews the bill.
The House Transportation Committee narrowly voted to pass the bill; the vote was cast along party lines. Voting in favor of the bill were Democrat House members Harriet Drummond, Sara Hannan, Ivy Sponholz and Grier Hopkins. Casting “no” votes were Republican House members Mike Cronk, Tom McKay and McCabe.
Contact political reporter Linda F. Hersey at 459-7575 or follow her at twitter.com/FDNMpolitics.