Fuel tax on hold for now

Posted: Wednesday, March 01, 2000

JUNEAU (AP) -- Gov. Tony Knowles' proposal to boost motor fuel taxes is on hold while legislators watch what the marketplace does to the price of gasoline.

House Bill 59 was pulled from the agenda of the House Transportation Committee on Tuesday amid concerns that consumers already will have to pay significantly more at the pumps.

Committee Chairman Andrew Halcro cited news reports that showed gasoline prices jumping 6 cents per gallon in the past two weeks and said he would delay consideration of the bill.

''I think this is the wrong time, as some have projected gas might be as high as $2 this summer,'' said Halcro, R-Anchorage.

The bill would more than double fuel taxes from 8 cents to 17 cents per gallon.

Knowles introduced the fuel tax proposal last year as a means of generating money to match federal grant money for transportation projects in Alaska. On most projects, the state pays 10 percent and the federal government pays 90 percent.

Alaska has the lowest gas taxes in the nation. If the proposed gas tax increase was adopted, Alaska would rank 45th on the list of states. Every penny increase would add $2.9 million to state coffers, according to the Department of Transportation.

The committee two weeks ago adopted a version of the bill that would have split the additional revenue with municipalities, which maintain 43.5 percent of Alaska's roads, according to the Alaska Municipal League.

The new version sent 5 cents per gallon of the proposed tax increase to municipalities based on how many road miles they have. Cities could use the money to fix potholes, remove snow or simply lower property taxes for residents.

''I think the concept is solid, with regard to splitting the money off and giving some to communities,'' Halcro said.

But the timing is bad now, he said. Halcro said the bill could appear on the committee agenda again if gas prices go down.

Halcro said the nationwide average price of gasoline last year was 99 cents.

''Now it's $1.41,'' he said.

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