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Tue June 4, 2013
State Gas Tax Increasing to 32.3 Cents A Gallon
FRANKFORT, Ky. -- The cost of gasoline will go up again in Kentucky, this time the result of an automatic tax increase written into law more than three decades ago.
Lawmakers were told in a meeting of the Interim Joint Transportation Committee on Tuesday that the gasoline tax will rise 2.4 cents next month to 32.3 cents a gallon, which would generate some $900 million over the next fiscal year.
Under Kentucky law, the gasoline tax is subject to periodic increases based on a formula that ties the rate to wholesale fuel prices.
"We can debate all day long if it's fair or not," said Sen. Ernie Harris, R-Crestwood. "But it is a mechanism we've lived with over 30 years."
Kentucky surveys wholesale gasoline prices every three months to determine whether the gas tax should rise or fall. That's meant a consistent string of increases over at least the past five years that have pushed the tax rate up by more than 11 cents a gallon.
Lawmakers implemented the current system in 1980 amid concerns that rising gasoline prices would cause people to purchase less fuel, which would mean less revenue for highway maintenance and construction.
The gas tax increase will generate an additional $72 million for the Road Fund at a time when revenues are falling short of budget projections.
Facing an anti-tax climate, Kentucky has looked for ways to increase revenue. Last year, lawmakers authorized a tax amnesty program under which delinquent taxpayers could settle up without fear of prosecution.
Earlier this year, lawmakers approved another initiative that punishes people who fall behind on their income taxes by taking away their licenses to drive, practice law, even cut hair.
That provision, which could affect people with any kind of professional business license, was tucked into a law passed on the final day of this year's legislative session and signed by the governor.
State Rep. Hubert Collins, D-Wittensville, chairman of the House Transportation Committee, said the measure slipped through in a complex pension reform bill without many lawmakers knowing it. Collins said he was among those caught unaware.
Harris, chairman of the Senate Transportation Committee, said the measure makes little sense because it takes away people's ability to work, leaving them unable to pay taxes. Harris said the provision never would have passed if it had come through his committee.
"It's like the old debtors prison form a couple of centuries ago," Harris said. "It just seems like it was not completely thought through."