Addressing transportation-funding challenges is a constant struggle at statehouses across the country.
To make matters worse, states commonly route transportation-related revenues for other purposes. State general funds are a regular beneficiary of taxes and fees collected from truck drivers and others.
General funds can be used by states for just about anything. Transportation may or may not get a small portion of what was initially routed to the general fund.
State lawmakers in one western state acted this year to provide a shot in the arm for transportation-funding needs. Legislators are continuing discussions to do more.
Using vehicle revenue for transportation
Wyoming Gov. Mark Gordon signed into law a bill to divert revenue from the state’s main bank account to the state’s road account.
The new law allows the state to annually move vehicle sales and use taxes collected on motor vehicles and trailers from the general fund to the highway fund. The rule change does not apply to sales of agricultural vehicles.
The Wyoming Department of Transportation supported this switch that amounts to an additional $70 million annually for roads.
“Our position on it is if you’re going to buy a vehicle, you’re probably going to use it on a road,” WYDOT Director Darin Westby previously told lawmakers. “Therefore, some of those taxes should come to help maintain and work on roads.”
Revenue from the 4% sales tax will be used for operation, maintenance, construction and reconstruction of state highways. The tax collected will not increase.
Could more road revenue be on the way?
Talks continue at the statehouse about how to generate more road revenue.
The Joint Transportation, Highways and Military Affairs Interim Committee met recently to discuss proposals to help the state address funding needs.
WYDOT reported the agency’s annual shortfall is about $411 million.
One option discussed by committee members is whether to increase the state’s 24-cent fuel tax rate.
Lawmakers reviewed a proposal to raise the fuel rate by 10 cents over multiple years.
An initial 5-cent increase would take effect in July 2026. Another nickel increase would be implemented in summer 2028. At that time, the tax rate for gas and diesel would be 34 cents.
Dennis Byrne, chief financial officer for WYDOT, told the committee each penny increase to the fuel tax raises $6.8 million annually for state and local funding. His agency would receive $4.5 million of that amount, which would total $22.5 million for a nickel increase.
Wyoming Trucking Association President Kevin Hawley testified his group supports the bill draft. He added that the group’s support is contingent on funds being used exclusively for the highway system.
The transportation committee will continue discussion on a possible fuel tax increase during the group’s Oct. 20 meeting. LL
More Land Line coverage of Wyoming news is available.
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