BISMARCK - The North Dakota Senate rejected a 4-cent boost in the state’s gas tax Monday, Feb. 4.
Senate Bill 2288 failed in a 26-18 vote. Pushed primarily by Fairmount Republican Sen. Larry Luick, the bill would have inched the state’s taxes on motor vehicle and special fuels, including diesel, to 27 cents per gallon.
Bill proponents urged lawmakers to address the state’s road funding needs. Sen. Kyle Davison, R-Fargo, said the state’s top industries, oil and agriculture, rely on well-maintained roads.
“I’m not quite sure why we’re not interested in sending this across the hall and having a discussion,” he said. “Let the people of North Dakota come over there and have a discussion if they’re really against it.”
The American Society of Civil Engineers assigned a “B-minus” grade to North Dakota’s roads last week. The gas tax hike was supported by groups representing local governments, farmers and highway builders.
The state’s tax hasn’t been raised since 2005, and the federal tax of 18.4-cents-per-gallon hasn’t increased since 1993. North Dakota’s tax is lower than its immediate neighbors.
As introduced, the bill would have increased fuel taxes to 30 cents per gallon, but it was amended down. The new version was projected to generate an extra $59.2 million in revenue during the 2019-21 budget cycle.
But it faced an uphill battle in a Republican-controlled statehouse. Republican Gov. Doug Burgum didn’t include a gas tax increase in his proposed budget for 2019-21 and promised not to raise taxes on the campaign trail.
Davison called tax increases a “difficult sell” in the Legislature. Still, the Senate approved new fees on electric and hybrid vehicles last week, and it’s poised to consider raising driver’s license fees Tuesday.
A separate bill backed by Democratic lawmakers that would raise the gas tax to 30 cents per gallon is still alive in the House.