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Senate committee backs bill to lock Utah motor-fuel tax floor amid revenue concerns
Summary
The Senate Revenue and Taxation Committee voted unanimously to favorably recommend SB 247, which resets the gas tax floor to today’s rate (37.9¢/gal) to prevent automatic reductions tied to volatile rack prices. Supporters said it preserves funding for local B and C road programs; critics warned it removes a mechanism for occasional tax relief.
The Senate Revenue and Taxation Committee voted to favorably recommend Senate Bill 247, a measure that would reset Utah’s motor fuel tax floor to the current 37.9 cents per gallon and prevent future automatic reductions tied to benchmark rack prices.
Senator Buss, sponsor of SB 247, told the committee the bill “is freezing the floor that already exists on today's gas tax,” saying it “resets the floor to the current rate of 37.9¢ per gallon by updating the floor rack price.” She described the change as correcting an unintended mechanism in 2023 law that allowed the tax to drop.
Kurt Gossler, drafting attorney with the Office of Legislative Research, explained technical details of the existing formula and projected that “the gas tax will decrease by about 4¢” next year under current law. He said SB 247 would keep the rate from dipping below this year’s level.
Lisa Wilson, deputy director for engineering and operations at the Utah Department of Transportation, said the department is neutral on the bill but cautioned that declining gas-tax rates have reduced transportation fund revenue at a time construction costs and maintenance needs are rising. “When the gas tax declines, the funding drops automatically even though our costs don't,” she said, and estimated that declining rates could reduce transportation-fund revenue by roughly $16.5 million over two years compared with holding the rate flat to 2025 levels.
Supporters emphasized the effect on local road funding: Andrew Gruber, executive director of the Wasatch Front Regional Council, noted that roughly 30% of the motor-fuel tax flows to cities and counties through the B&C formula and that a stable floor would aid local planning. The Utah League of Cities and Towns’ Carson Eilers also expressed support for the stability the bill would provide.
Opponents argued the original policy allowed occasional tax relief for consumers when fuel prices fell. Billy Hesterman of the Utah Taxpayers Association said the mechanism was envisioned to provide taxpayers periodic breaks and that changing it “loses that ability for there to be breaks.”
The committee adopted a technical amendment (Senate Amendment 1) to correct a drafting numeric reference and then voted to recommend the bill to the floor. The committee’s recommendation was unanimous.
