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Senate committee approves substitute raising fuel and diesel taxes, with debate over CPI indexing and rural impacts

Senate Finance Committee · February 16, 2026

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Summary

A Senate Finance committee substitute for SB76 raised the regular fuel tax to 20¢/gal and diesel to 25¢/gal (per the substitute discussed). Senators debated CPI indexing, agricultural exemptions for red-dyed diesel, and DOT accountability for maintenance; committee adopted the substitute and recorded a 'do pass' recommendation.

Senate Bill 76 and a committee substitute were considered by the Senate Finance Committee. The substitute under consideration raised the regular fuel tax from 17¢ to 20¢ per gallon and diesel from 21¢ to 25¢ per gallon (substitute numbers discussed in committee). Senators debated using a CPI escalator to avoid periodic reauthorizations, the fairness of a one-time cent increase, and exemptions for off-road/red-dyed diesel used in agriculture.

Committee members expressed concern about the frequency of revisiting the tax and about the burden on rural economies that rely on diesel. Supporters emphasized the need to increase dedicated revenue for road maintenance and to avoid the higher long-term costs of deferred maintenance. The committee adopted the substitute and recommended 'do pass' in committee; roll calls recorded mixed yes/no votes across senators.