S.B. 247 Road Funding Amendments: transcript

Um, I have amendments online. I'm gonna speak to the amendments. Um, SB 2 47, um, is a bill that is freezing the floor that already exists on today's gas tax. So it's not increasing the gas tax, it's just keeping it at today's rate. Um, in 2023, uh, the legislature temporarily capped the tax at HB 3 0 1 and it inadvertently introduced a mechanism that allowed the gas tax to decrease year over year. Um, and this reduction comes at a time when transportation projects are becoming increasingly more expensive. So, SB 2 47 just corrects that issue by resetting the floor to the current rate of 37.90 cents per gallon by updating the floor rack price. All other changes in the bill are technical. That concludes my presentation.

Thank you, Mr. Chair. My name is Kurt Gosser with the Office of Legislative Research General Counsel. I'm the drafting attorney on this bill, and you're all aware, but I'll, uh, mention it again. Uh, we're a nonpartisan office. Uh, I don't, I'm not speaking in support or against the bill. Just trying to provide some, some background and maybe some technical

Sure. So the number, uh, 1 78 that you see in code is actually not completely accurate. 'cause that is adjusted up every year due to inflation. So the floor is actually quite a bit higher than that. Uh, there are instances though, uh, this coming year it's projected that the gas tax will decrease by about 4 cents. And so, and we'll be hitting up against that floor. So, uh, center buses bill would have the effect of keeping us level with where we are this year and not dipping below, uh, creating the floor to what it is today.

Billy Hesterman with the Utah Taxpayers Association, uh, I, I'm a little torn on this bill. We are concerned about increasing the floor. Uh, you know, as we went through negotiations on this, uh, 10 years ago, it was envisioned that there would be some protection for taxpayers that as the market adjusts, so does, so, does the gas tax. And that, that was kind of the trade off from when we moved from just holding its steady. It the, uh, 24 and a half cents per gallon rate that held for 20 something years that then we moved to this where it would ebb and flow with, with the, uh, the market. Uh, you know, it was envisioned that maybe there would be times when there'd be a tax break for taxpayers. And by adjusting this, we're we're losing that ability for there to be many tax breaks. And they rarely happen. It looks like, as I've been looking at the data, that it's only happened twice in the 10 years now that we've been doing this. And then in the other eight years we've seen increases. And so I, I am concerned that, you know, we are losing that ability for there to be breaks, but also understanding on the flip side, uh, it's vital to our economy that we do have our roads and our transportation system running at the, the most optimal way possible. And that, uh, you know, that's beneficial to the state as a whole. So I guess I'm giving a conflicted, uncomfortable about the bill, but understand why it's being talked about.

Good afternoon, Mr. Chair. I'm Lisa Wilson, the udot Deputy Director for Engineering and Operations. The department is neutral on this bill since it wasn't part of the governor's budget. That being said, though, Senator Bus's Bill does address a real and growing concern, as she mentioned, since 2023, Utah's gas tax formula allows the tax to decline when fuel prices fall. This has reduced the transportation fund revenue at a time when traffic infrastructure needs and construction costs continue to rise. The transportation fund is the source for the local b and C funds. Uh, it funds our department operations. This is how we pay our people by materials, maintain and operate the system. It funds projects. And these projects aren't your typical projects that you talk about a lot. Um, they're not capacity. These are the projects we do to take care of what we have. Recent estimates show that declining gas tax rates will reduce the transportation fund revenue by roughly 16.5 million over the next two years, compared to holding the right flat to what it was in 2025. Uh, when the gas tax declines, the funding drops automatically, even though our costs don't. Um, and continued declines will mean deferred maintenance, reduced purchasing power, and higher long-term cost to taxpayers. Senator Bus's Bill would set a minimum tax rate of 37.90 cents per gallon. It would prevent automatic reductions, um, driven by the fuel price volatility, prevent revenue, or provide revenue stability and preserve the gas taxes. January 1st, 2026, purchasing power. This does not raise gas taxes today. It simply ensures that transportation funding does not erode during periods of low prices. Thank you,

Mr. Chair and members of the committee. I'm Andrew Gruber, executive Director of the Wasatch Front Regional Council. We similarly have not taken a position on this bill. Our body has not had a chance to have dialogue about it yet. But I do want to echo what Lisa Wilson just said. Having stability and predictability in the revenue going for infrastructure investment is essential to plan and deliver on the necessary projects for maintaining our transportation system in a state of good repair, a safe state of repair. Uh, as we all know, 30% of the motor fuel tax goes to the cities and the counties through the B and C formula. And so just as this would help provide stability for UDOT and their roadway maintenance, it also would help provide stability for the cities and the counties. And we appreciate that Signing. Thank you.

Uh, thank you Mr. Chairman. My name is Carson EERs and I'm the policy director for the Utah League of Cities and Towns. Um, we, for the same reasons that Andrew, uh, expressed, we're supportive of this bill. Um, it's this bill funds Class BNC or sorry, gas tax funds, class B and C road funds, which are critical for local governments to maintain our road infrastructure. Utah, as you know, is one of the fastest growing states in the country consistently. And those road funds are really essential for us just being able to keep up with the new impacts on our roads, fill potholes, and help maintain Utah's quality of life. Thank you.

We favorably recommend, uh, Senate Bill 2 47.

Gonna support it. Um, I have, you know, I think this pass in my, my first session here, the original bill to, you know that right? Johnny Anderson, And I was against it then. 'cause I thought that it was so shortsighted, um, that it, uh, you know, it tied this to the price of the rack, which is so volatile that if the effort was really to just ensure that we had stable transportation funding, we were missing the mark. Um, uh, I, I would've preferred, you know, uh, uh, a version of this that was more tied to inflation in general, rather than making, uh, our transportation funding reliant on the whims of oil rich countries and, you know, how much they're willing to produce or, uh, at any given time. And the fact that Utah is, or that the well Utah, but, and, uh, the United States is an oil exporter now, and there's so much more supply in the world, uh, anyway, stability in, in, in, in revenue is, uh, generally a good thing as long as we're not, uh, you know, raising taxes and asking more from people. But inflationary thing on a, on the, on a fixed price, that's a fixed number of cents. You know, if it doesn't go up occasionally, then it's, uh, it just loses its power and stability. And as, as Mr. Hesterman said, transportation is a key part of a functioning economy. So I'm not positive this is the right solution, but I'd like to see it move forward so we can have whatever further debate we'll land us at the right policy solution.

There is. I was just gonna actually ask, uh, Gabe, Lemme let me Change that. Withdraw your motion And let me move instead to adopt the amendment.

Um, I think the drafting attorney had just used the number for a previous year when they were looking at it. So it's just inadvertent. Okay. Mistake. So it's just correcting to the current one.

I'd move that we pass out favorably Senate bill 2 47 as amended.

Yeah. They're waiting for it to be adopted so that they could update it with the right number, I guess.

Thank you Mr. President. I have an amendment online in my name that I'd like to move and then I will circle it while the fiscal note catches up.

Um, amendment two just changes the rack price from today's rate of 2 67 to next year's reduced rack price of 2 39. That is the entire amendment.

Thank you Mr. President. Uh, motion to circle while the fiscal note catches up.

Thank you.

Thank you Mr. President. I'm told that that, uh, substitute's online.

I need a motion to three four unc

Uh, lower rate. And, uh, this does not interfere with the speaker's bill. It's, it starts after his six month, uh, reduction ends and then it is at the lower tax cut for the gas tax starting in January. That concludes my presentation.

Okay. I'm gonna make a motion. Colleagues listen up. I'm gonna put some fiscal note, some house fiscal note. Bills up and be watching for your name attached to the, so Mr. President, I move that the following bills be moved to the top of the second reading calendar in the following order. House Bill 5 46 House bill 2 49. First substitute house bill 2 76. First substitute house bill 360 6 House bill one 92nd substitute house bill 3 76 House bill 3 93. Second substitute. That's the first motion. I will have one more motion after that. Thank You. We have a motion to lift those bills to the top of the second reading calendar.

Senator McKay Mcal for another. Yeah. Thank you. I move that the following bills be lifted from the Senate table. Third reading calendar and placed after second substitute house bill 3 93 house bill 2 0 9. Third substitute house bill 78 house bill one ten Third substitute house bill 1 46. House bill two 90 and house bill three 90. Substitute one. That is the motion.

I se I think the circle needs to, we need to saunter. Yes. Circle needs. Yes. We're we're gonna move to Saunter. Let the circle catch up with the new bill. Let's Saunter for at least five minutes. But, but in the meantime, colleagues look and look at these new bills and look and see if you've got it. Your name's attached.