New Revenue Subcommittee

RecommendationsRecommendations

Criteria

ElasticityElasticity Ability to phase inAbility to phase in User-basedUser-based YieldYield Ease of administrationEase of administration

Strongly Recommended:

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

and Diesel Fuelsand Diesel Fuels

Indexing Gas & Diesel Tax to Construction Cost Index-3 Restores and Preserves Purchasing PowerRestores and Preserves Purchasing Power ElasticElastic Uses existing collection systemUses existing collection system

PROPOSED FEATURESPROPOSED FEATURES:: Automatic adjustments by DFAAutomatic adjustments by DFA 2¢ per year ceiling on increases2¢ per year ceiling on increases Hard floor - Adjusted tax can’t go below Hard floor - Adjusted tax can’t go below

previous year’s rateprevious year’s rate

Excise Tax on Wholesale Price of Motor Fuels

ElasticElastic Can be phased- inCan be phased- in Can raise substantial revenueCan raise substantial revenue Uses existing collection systemUses existing collection system Avoids problems associated with a sales tax Avoids problems associated with a sales tax

on motor fuels on motor fuels

Recommended for Consideration:

Special Sales Tax on New and Used AutosSpecial Sales Tax on New and Used Autos User basedUser based Administered through existing Administered through existing

mechanismsmechanisms

Not Recommended at This Time:

Vehicle Miles Traveled FeeVehicle Miles Traveled Fee Uncertain collection methodsUncertain collection methods Privacy concernsPrivacy concerns Absence of federal standardsAbsence of federal standards

Carbon TaxCarbon Tax Not elasticNot elastic Not strictly a user feeNot strictly a user fee

Public Private Partnership/TollingPublic Private Partnership/Tolling Not viable, reassess periodicallyNot viable, reassess periodically

Not Recommended:

Income taxIncome tax General Sales TaxGeneral Sales Tax Remove Sales Tax Exemption on Motor Remove Sales Tax Exemption on Motor

FuelsFuels Special Sales Tax on Auto Parts and Special Sales Tax on Auto Parts and

ServicesServices

Remove Sales Tax Exemption on Motor Fuels Streamlined Sales Tax Agreement would require Streamlined Sales Tax Agreement would require

levying the full 6% state sales tax, plus local sales levying the full 6% state sales tax, plus local sales taxes immediately, resulting in major increase in taxes immediately, resulting in major increase in price of fuel to consumersprice of fuel to consumers

Would apply to final purchase price including Would apply to final purchase price including federal excise taxes, making it a tax-on-a-taxfederal excise taxes, making it a tax-on-a-tax

Needs Further Study:

Weight Distance TaxWeight Distance Tax High collection costs and inefficienciesHigh collection costs and inefficiencies Traditional license and excise fees preferred by Traditional license and excise fees preferred by

trucking industrytrucking industry Lack of empirical analysis to determine Lack of empirical analysis to determine

trucking industry “fair share”trucking industry “fair share” Dedication of Streamlined Sales Tax Agreement Dedication of Streamlined Sales Tax Agreement

revenue to transportationrevenue to transportation License Fees and Miscellaneous RevenuesLicense Fees and Miscellaneous Revenues

POLICY BRIEFS Adjustment FactorsAdjustment Factors Income TaxIncome Tax Sales Tax OptionsSales Tax Options

General Sales TaxGeneral Sales Tax Special Sales Tax on New & Used AutosSpecial Sales Tax on New & Used Autos Sales Tax on Auto Parts and ServiceSales Tax on Auto Parts and Service

Remove Sales Tax Exemption on FuelsRemove Sales Tax Exemption on Fuels New Excise Tax on Wholesale Price of FuelsNew Excise Tax on Wholesale Price of Fuels Excise Tax on Gas and DieselExcise Tax on Gas and Diesel Vehicle Miles Traveled TaxVehicle Miles Traveled Tax Carbon TaxCarbon Tax Equitable Share for Heavy TrucksEquitable Share for Heavy Trucks Public Private Partnerships/TollingPublic Private Partnerships/Tolling

Adjustment Factors

Vehicle Miles TraveledVehicle Miles Traveled Average Fleet Fuel EfficiencyAverage Fleet Fuel Efficiency Fuel PricesFuel Prices Construction Cost InflationConstruction Cost Inflation

Analysis Tool

Sets Level 1 Indexed TargetsSets Level 1 Indexed Targets Calculates VMT and FFE ImpactsCalculates VMT and FFE Impacts Gas and Diesel Excise TaxesGas and Diesel Excise Taxes Excise Tax on Wholesale Price of FuelsExcise Tax on Wholesale Price of Fuels Special Sales Tax on New & Used AutosSpecial Sales Tax on New & Used Autos Transfer of Sales Tax on Auto Related ItemsTransfer of Sales Tax on Auto Related Items