The Senate has adopted a substitute to HB 5477 that would gradually increase the new percentage tax on gasoline over four years from 9.5 percent beginning January 1, 2015, to 11.5% beginning January 1, 2016, and to 13.5 percent beginning January 1, 2017. For the year beginning January 1, 2018, the rate would be increased to 15.5 percent.

The changes to the bill, which repeals current fuel taxes, 19 cents per gallon and 15 cents per gallon on diesel, and replaces them with a percentage tax on the wholesale price, was the most significant change the chamber made to several House and Senate bills whose goal is to increase revenue to improve our transportation system. The House had originally proposed in HB 5477 a rate of 6 percent, a level said to be revenue-neutral.

The Senate is looking to hopefully pass these bills Tuesday or Wednesday of next week.

Earlier in the day, the Senate Infrastructure Modernization Committee had reported the bills with only one change to HB 4630, which would remove a provision of current law that offers a 10 percent reduction in registration fees for purchasers of new vehicles over three years. It is estimated that change could yield about $140 million.

Overall the package of bills represent nearly $2 billion in new revenue for our transportation system.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at jlamacchia@mml.org or 517-908-0303