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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Senate Approves Raising Gasoline, Diesel Taxes

Toby Talbot

It’s likely that Vermonters will pay more for gas and diesel fuel in about 10 days.

That’s because the Senate approved legislation increasing those taxes, and legislative leaders are seeking quick compromise with the House.

That’s because they want the tax hikes to be in place at the beginning of May.

The vote in the Senate was 23-5.        

The Senate plan imposes a 4 percent sales tax on gasoline. Senate Transportation Chairman Dick Mazza says it’s critical to move away from the current per-gallon tax because of declining gas sales.

The net effect of the Senate bill would be a roughly 6-cent increase for a gallon of gas.  The plan also raises the diesel tax by 4 cents over the next two years.

Mazza says the state needs the revenue to be able to take full advantage of all the federal matching funds that are available.

“As most of you know, I’m not a big fan of raising taxes," Mazza said on the Senate floor.  "But in this instance, faced with the potential loss of $56 million of federal funds – and that’s one of the key topics we’re talking about – is the state cannot afford to leave $56 million on the table at this time. There was little choice but to raise revenues in order to maintain the progress we’ve been making improving the condition of our transportation infrastructure.”

Washington senator Ann Cummings voted against the plan because she said it was regressive.

“Unfortunately, of all the tax proposals that have been brought, apart from the earned income tax credit, this one is the one I can’t support," Cummings said. "Mostly because of its impact on everyday Vermonters.”

A House-Senate conference committee will meet early next week to resolve their differences on the bill and the goal is to have the governor sign the bill by the end of next week.

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