Warning of funding needs, groups press North Dakota lawmakers for gas tax increase
BISMARCK — A parade of groups representing local governments, farmers and highway builders pushed for a seven-cent bump in North Dakota’s gas tax to pay for road projects Tuesday, Jan. 22.
Sen. Larry Luick, R-Fairmount, said he’s been “inundated” with requests from constituents who want to raise the 23-cent-per-gallon gas tax to improve road conditions. The state tax hasn’t been raised since 2005, and the federal tax of 18.4-cents-per-gallon hasn’t increased since 1993.
North Dakota’s tax is lower than its immediate neighbors, according to the American Petroleum Institute. New Minnesota Gov. Tim Walz has said he'll push for a gas tax increase in his state.
Transportation officials have warned billions of dollars will be needed to maintain North Dakota roads over the next couple of decades. Raising the tax on motor vehicle and special fuels, which includes diesel, to 30 cents per gallon would generate an extra $103.6 million in the 2019-21 biennium, according to a fiscal note attached to Luick's bill.
Russ Hanson, executive vice president of the Associated General Contractors of North Dakota, said there’s uncertainty over federal transportation funding, on which North Dakota is “highly dependent” for highways. And North Dakota Association of Counties Executive Director Terry Traynor said a gas tax increase would provide some "certainty" after recent one-time funding infusions from the Legislature.
"The maintenance needs are never ending," said Geoff Simon, executive director of the Western Dakota Energy Association, a group of local governments in the oil and coal-producing regions of the state.
Proponents of the increase said it wouldn’t cover all of the state's funding needs but would help. And Luick said he’d be willing to discuss a smaller increase.
“It’s a conversation piece,” he told the Senate Finance and Taxation Committee, which didn’t immediately act on the bill.
Republican Sen. Dwight Cook, the committee's chairman, said he's uncommitted about the idea of a gas tax increase but said a seven-cent bump might be too high. He also noted lawmakers are pushing a separate bill to earmark existing money for infrastructure projects outside the state's oil patch.
Nobody testified against Senate Bill 2288 Tuesday. Republican Gov. Doug Burgum, who didn’t include a gas tax increase in his proposed budget for 2019-21 and promised not to raise taxes on the campaign trail, generally doesn’t comment on bills until they reach his desk, his spokesman Mike Nowatzki said.
The Legislature is also considering a new “road use fee” for owners of electric and hybrid vehicles to make up for lost fuel tax revenue. On Thursday, a Senate committee will hear a bill to raise driver's license fees.