CHEYENNE — If the price at the pump is a bit higher today than Sunday, it’s because the 10-cent increase in the state fuel tax has kicked in.
The tax officially jumped from 14 to 24 cents per gallon as of midnight. It’s the first hike authorized by the Wyoming Legislature since 1998.
The increased levy is expected to generate $71.8 million per year for state and local roads despite falling far short of the Wyoming Department of Transportation’s estimated construction and maintenance needs. Still, agency officials say any increase in funding helps.
The higher tax has been estimated to cost each family in the state $114 per year.
Although it may not mollify unhappy motorists at the pumps, the increase may not be as high as 10 cents.
State Rep. Mike Madden, R-Buffalo, an economist and supporter of the higher tax, said that while motorists will see a bump up in the cost for gasoline and diesel, it is more likely to be five or six cents.
“The old-timers around here say that when the state raised it from 9 to 14 cents, the price per gallon jumped by a nickel and then it went right back down to where it was,” Madden said Thursday.
“It’s hard to predict. It depends on what the marketers do,” he added.
Gasoline prices are now about $3.25 per gallon. They were about $1 per gallon when the tax was raised 15 years ago.
“It’s not a tax-driven price any more. It is determined by the refineries,” Madden said.
“People have to understand that there is no such thing as a Wyoming fuel market. It’s a regional market,” he added.
Of the 245 companies that supply fuel to Wyoming retailers, only 51 have a Wyoming address. The suppliers set the price at the start of the month for Wyoming, South Dakota and Nebraska at the same time.
Madden said friends in South Dakota say Wyoming’s tax increase will mean a boost of a few cents.
Meanwhile, WYDOT is working on a list of projects.
The department earlier established a separate account in the state Auditor’s Office for the money from the tax hike. The purpose is transparency — to ensure that the money is spent on highways, as the Legislature intended.
“What we’re doing is ensuring that all of the fuels tax will be targeted at pavement preservation,” said Gregg Fredrick, WYDOT assistant chief engineer for engineering and planning.
The preservation work, he said, will extend the roadway surface life by sealing cracks on existing roadways and adding additional pavement on top, for example.
The work also may be “more robust rehabilitation,” such as removing part of the roadway and installing a thicker driving surface.
The department examines the condition of the roadways each year and the deterioration rate.
An asset management system identifies the costs and benefits for the best method to extend the lives of the roadways.
The additional tax money will be spent on these type of projects statewide, he said.