New Revenue Subcommittee

1
New Revenue Subcommittee

• Recommendations

2
Criteria

• Elasticity
• Ability to phase in
• User-based
• Yield
• Ease of administration

3
Strongly Recommended

• Indexing Gas and Diesel Excise Taxes
• New Excise Tax on Wholesale Price of Gas and
  Diesel Fuels

4
Indexing Gas Diesel Tax to Construction Cost
Index-3

• Restores and Preserves Purchasing Power
• Elastic
• Uses existing collection system
• PROPOSED FEATURES
• Automatic adjustments by DFA
• 2 per year ceiling on increases
• Hard floor - Adjusted tax cant go below previous
  years rate

5
Excise Tax on Wholesale Price of Motor Fuels

• Elastic
• Can be phased- in
• Can raise substantial revenue
• Uses existing collection system
• Avoids problems associated with a sales tax on
  motor fuels

6
Recommended for Consideration

• Special Sales Tax on New and Used Autos
• User based
• Administered through existing mechanisms

7
Not Recommended at This Time

• Vehicle Miles Traveled Fee
• Uncertain collection methods
• Privacy concerns
• Absence of federal standards
• Carbon Tax
• Not elastic
• Not strictly a user fee
• Public Private Partnership/Tolling
• Not viable, reassess periodically

8
Not Recommended

• Income tax
• General Sales Tax
• Remove Sales Tax Exemption on Motor Fuels
• Special Sales Tax on Auto Parts and Services

9
Remove Sales Tax Exemption on Motor Fuels

• Streamlined Sales Tax Agreement would require
  levying the full 6 state sales tax, plus local
  sales taxes immediately, resulting in major
  increase in price of fuel to consumers
• Would apply to final purchase price including
  federal excise taxes, making it a tax-on-a-tax

10
Needs Further Study

• Weight Distance Tax
• High collection costs and inefficiencies
• Traditional license and excise fees preferred by
  trucking industry
• Lack of empirical analysis to determine trucking
  industry fair share
• Dedication of Streamlined Sales Tax Agreement
  revenue to transportation
• License Fees and Miscellaneous Revenues

11
POLICY BRIEFS

• Adjustment Factors
• Income Tax
• Sales Tax Options
• General Sales Tax
• Special Sales Tax on New Used Autos
• Sales Tax on Auto Parts and Service
• Remove Sales Tax Exemption on Fuels
• New Excise Tax on Wholesale Price of Fuels
• Excise Tax on Gas and Diesel
• Vehicle Miles Traveled Tax
• Carbon Tax
• Equitable Share for Heavy Trucks
• Public Private Partnerships/Tolling

12
Adjustment Factors

• Vehicle Miles Traveled
• Average Fleet Fuel Efficiency
• Fuel Prices
• Construction Cost Inflation

13
Analysis Tool

• Sets Level 1 Indexed Targets
• Calculates VMT and FFE Impacts
• Gas and Diesel Excise Taxes
• Excise Tax on Wholesale Price of Fuels
• Special Sales Tax on New Used Autos
• Transfer of Sales Tax on Auto Related Items