Push for state gasoline tax hike scrapped due to federal windfall

Rep. Jack McFarland, R-Winnfield, has dropped his plans to file a gasoline tax increase during the upcoming legislative session due, in large part, to the expected windfall in federal pandemic relief dollars headed to the state.

In a letter today, Erich Ponti, whose industry group Louisiana Coalition to Fix our Roads has been advocating for the gas tax hike, notified his members that McFarland will not be filing the legislation this session and instead “will shift his focus to identifying alternative funding sources that can garner the votes necessary for the package.”

Ponti adds, “While this shift is unexpected, we nonetheless will remain committed to our core missions, which is the greater sustainable funding for roads and bridges in our state.”

McFarland’s Government Reform in Transportation, or GRIT, Act, would have raised the state’s gasoline tax by 10 cents in the first year and by an additional two cents every other year until 2033. Each one-cent increase would have raised an estimated $30 million, which by 2033 would total some $660 million a year in new revenue.

But while the idea of a gasoline tax increase has been gradually gaining support, even among those in business and industry who previously opposed it, passage would have required a two-thirds vote of the Legislature, which is always a hard sell and would have been particularly difficult in light of the $5.18 billion share of pandemic relief aid Louisiana will get from President Biden’s American Rescue Act.

Members of Louisiana’s congressional delegation have suggested the state can devote a portion of that money to addressing its transportation infrastructure needs, which include a $15 billion backlog of deferred maintenance not including new capacity projects like a bridge across the Mississippi River in Baton Rouge.

“A couple of things have changed over the past couple of months,” says Scott Kirkpatrick, executive director of CRISIS, a Capital Region-based industry group that lobbies for transportation infrastructure. “Not only is the amount of federal money being discussed large, but more of the chatter has turned to how the state can get key projects through using that federal funding.”

With tax reform on the table this session, lawmakers are also discussing measures that would dedicate certain taxing streams, at least temporarily, to road and bridge projects, Kirkpatrick says.

“So, while a gasoline tax might be the cleanest and easiest way to get the revenue for these infrastructure projects, it’s just not needed as much right now so there’s not as much support for it,” he says.

What hasn’t changed is McFarland’s determination to overhaul the way the Louisiana Department of Transportation and Development is funded and operates, says Mary Patricia Wray, a strategist who has been working with LCFOR and McFarland on the GRIT Act.

A key portion of the bill would have capped spending at DOTD, which comes from the state’s Transportation Trust Fund, imposed greater oversight of department spending and incentivized cost-saving measures.

McFarland still plans to file a version of the GRIT Act that will identify new sources of state funding for transportation infrastructure projects and reallocate funds from the DOTD operating budget to a constitutionally protected sub fund of the TTF that can only be used for road and bridge projects.

Wray says a new version of the bill is being finalized.