House Transportation committee reviews purchase-and-use tax, weighing shifts in split with education fund

The House Transportation Committee on Feb. 26, 2025 heard from Logan Mulberry, fiscal analyst at the Joint Fiscal Office, on how the state’s purchase-and-use tax funds transportation and education and what changing the current allocation would mean.

Mulberry told the committee that the purchase-and-use tax includes a 6% tax on the value of motor-vehicle purchases and a 9% tax on short-term rental vehicle charges. “The transportation fund receives two thirds of purchase-and-use revenue currently, and then the Ed Fund gets the other third,” he said. For fiscal year 2026 the JFO forecasted total purchase-and-use revenue of about $157.5 million, with roughly $105 million directed to the Transportation Fund and $52.5 million to the Education Fund.

The presentation traced the tax’s history and earlier statutory changes. Mulberry noted that a 1997 change as part of Act 60 created the Education Fund and that a…