Gas Tax Increase Set For January 1st | KUER 90.1

Gas Tax Increase Set For January 1st

Dec 30, 2015

Starting January 1st the state tax Utahns pay on gasoline will be going up. But that doesn’t mean they’ll instantly be paying more at the pump.

This year state lawmakers passed a 4.9 cent per gallon increase to Utah’s gas tax. It is the first increase to the tax since 1997 and will bring in an estimated $76 million a year in new transportation revenue. But the increase does not mean that consumers will see gas prices automatically increase. John Hill is the president of the Utah Petroleum Marketers and Retailers Association. He says the price is mostly dictated by large chains.

“The competition on the street corner is what sets the price," he says. "If Smith’s start selling gas really low or some other competitor, the other stores either match the price, or lose volume.”

Of the new revenue from the tax, 70% will go to the state and 30% will go to counties and cities. Claudia Jarrett is a Sanpete County Commissioner. She says the new revenue will help them, and other rural counties, catch up with much needed road repairs.

“Sanpete County being very rural, just our county has responsibility for over 500 miles of road," she says. "So, it’s quite a challenge to keep those roads maintained.”

She estimates the tax increase will bring in about $200 thousand a year for the county. She also says while the new tax is a burden for people, it’s a fair way to generate transportation revenue.