Legislature passes gas tax increase to fund spill cleanup

Sen. John Coghill, R-North Pole and majority leader, left, speaks with Sen. Peter Micciche, R-Soldotna, before a vote on increasing the state's motor fuel tax on Friday, April 17, 2015.

The Alaska Senate has approved a new tax on refined fuel to pay for a spill prevention and response program run by the Alaska Division of Environmental Conservation.


The Senate voted 13-7 on Friday to increase the pump price of gasoline, marine fuel and heating oil by 0.95 cents per gallon.

House Bill 158, proposed by Rep. Cathy Muñoz, R-Juneau, suggested a cent-per-gallon increase. It passed the House by a single vote, 21-19, on April 8.

As the bill moved its way through committees in the Senate, senators cut the proposed tax increase by five hundredths of a cent, to provide what DEC has truly asked for, said Sen. Peter Micciche, R-Soldotna.

“We thought a penny a gallon was too much,” he said while testifying in favor of the bill.

DEC commissioner Larry Hartig previously said the state’s spill response program would be facing a “$3 million to $7 million hole” in the next fiscal year without help.

The proposed tax increase will not affect the cost of aviation fuel or fuel for the Alaska Marine Highway. Micciche said the FAA controls taxes on fuel sold at FAA-regulated airports, and “frankly, it was more trouble than it was worth” to deal with the FAA.

Furthermore, the tax is only applied once — on sales from a gas station to a driver or boater. It doesn’t apply to sales from a refiner to the gas station.

The DEC program typically deals with cleanup in cases when a responsible party can’t be found to take charge of cleanup. Sometimes, Micciche said, a homeowner has died or a business has gone out of business, leaving a spill behind.

Opposition to the bill came largely on the taxation grounds. “It looks like another tax and spend operation,” said Sen. Bert Stedman, R-Sitka.

Sen. Click Bishop, R-Fairbanks, responded that the tax isn’t necessarily permanent. On the Senate floor, he promoted the idea of spill prevention through education and said that if education results in fewer spills, there will be less need for a cleanup fund.

“Maybe some day in the not-too-distant future, we could come back and remove this,” he said.

Late Saturday, the House agreed with the Senate’s changes. It now goes to Gov. Bill Walker for his signature.

If the bill becomes law, it would be the first tax increase on the public since 2005.


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