A bill was introduced Wednesday in the Kentucky General Assembly just before the filing deadline for legislation that would raise the state gas tax by 10 cents per gallon, in addition to imposing new fees and raising existing one on motor vehicles.
House Bill 517 closely resembles a bill that did not receive a vote in last year’s session despite the backing of bipartisan legislators and chambers of commerce, raising such taxes and fees to modernize and replenish the state road funds, which would allow needed improvements to crumbling transportation infrastructure.
In addition to the 10-cent increase to the state gas tax, HB 517 would impose a new annual registration fee of $175 for the electric car owners, as they are exempt from the gas tax that funds the maintenance of state and local roads.
The bill would also nearly double the annual registration fees for passengers vehicles and motorcycles to $22 and $15, respectively. Additionally, it creates a new “highway preservation fee” for owners of all noncommercial motor vehicles that ranges from $5 to $20, based on the EPA fuel efficiency rating of that vehicle.
The similar bill from last year was estimated to generate $433 million of annual revenue for state and local governments, but the conservative political advocacy group Americans for Prosperity-Kentucky has reiterated its opposition to such legislation as an “unfair, unnecessary, regressive tax increase” that serves as “a band-aid solution to the commonwealth’s overspending problem.”
Americans for Prosperity state director Andrew McNeill also issued a statement on Thursday criticizing Kentucky Transportation Cabinet Secretary Greg Thomas for endorsing an increase to the gas tax this week, which he said runs “completely against” Gov. Matt Bevin’s administration’s “commitment to get Kentucky’s fiscal house in order.”
However, this plan to increase the gax tax and vehicle fees maintains the support of the Kentucky Chamber of Commerce and Greater Louisville Inc., which argue that business in the state is being harmed by crumbling roads and infrastructure.
The lead sponsor of HB 571 is Rep. Sal Santoro, R-Florence, and among its 11 co-sponsors is Republicans Rep. Jerry Miller of Louisville.
Because this is an odd-numbered year and a short session of the General Assembly, HB 517 would need a vote of 60 percent of each chamber for it to be passed into law, as it deals with government appropriations.