South Dakota House committee secures more time to review options for road and bridge funding

Energy Associated Press

Concerns about long-term increases in gas taxes to help pay for South Dakota's roads and bridges prompted House lawmakers on Tuesday to buy about two more weeks to examine the issue.

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The House State Affairs Committee unanimously killed its version of a transportation package in favor of a more limited Senate proposal. The move allows lawmakers to avoid a Tuesday legislative deadline for bill consideration and extend debate by taking up the Senate plan later.

House Majority Leader Brian Gosch said the committee had too many questions about the size of the tax hikes in the proposal compared with what's needed to pay for roads and bridges.

"I'm not certain if we have answers to many, many of the questions that were asked today," said Rep. Roger Solum, a Republican from Watertown. "I have some serious concerns about this."

The House plan would have raised the gas taxes 2 cents each year for 15 years, while the Senate plan would raise it 2 cents each year for eight years. Both proposals are modified versions of the transportation plan Gov. Dennis Daugaard has proposed, which raises about $50 million in road and bridge funding in its first year through increases in fuel taxes, fees and other assessments.

Transportation funding is likely the most hotly debated issue lawmakers will consider during the 2015 session. Tax increases require two-thirds legislative support to pass.

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"Does the current bill ... exceed what the need actually is?" Gosch said after the hearing. "There will be a lot more to do in the next two weeks."

The governor's director of policy and operations, Nathan Sanderson, told the committee that South Dakota's fuel tax has remained flat for years, but the state's transportation construction costs have increased significantly. The state and local governments say hundreds of millions of dollars are needed each year for repairs.

The state alone has identified an average necessary yearly spending increase of more than $140 million to keep up with future funding requirements, Sanderson said.

The oil and gas industry opposed the longer-term increases in motor fuel taxes included in the House plan that stretched until 2030. Daugaard's original plan proposed ongoing increases in fuel taxes without a set end date, whereas the increases in the Senate plan would expire in 2023.

South Dakota Petroleum and Propane Marketers Association Executive Director Dawna Leitzke said that the annual fuel tax increases in the House proposal would have made South Dakota less competitive with surrounding states.

South Dakota's fuel taxes currently are lower or roughly on par with neighboring states, but Leitzke said the House plan would drastically change that.

Sanderson said the governor is flexible with the provisions the proposal includes as long as it addresses the state's funding needs.

"As long as we meet the need, he's not particularly concerned what the soup looks like," Sanderson said.