Louisiana House Bill HB542

Louisiana 2019 Regular Session

• Introduced: 3/29/19
• Refer: 3/29/19
• Refer: 4/8/19

Caption

Increases the per gallon excise tax on gasoline, diesel, and certain special fuels and levies an excise tax on electric and hybrid vehicles (OR -$305,000,000 GF RV See Note)

Impact

The bill's implementation is expected to have significant implications for state laws regarding fuel taxation and vehicle registration. Specifically, the avails from these taxes are earmarked for the Construction Subfund of the Transportation Trust Fund, aiming to finance state road and bridge projects. As a result, it may facilitate improvements in the maintenance and development of highway systems, which have been long-neglected due to insufficient funding. However, the gradual tax increments may face backlash from consumers and businesses who rely heavily on fuel, raising potential concerns about increased operational costs.

Summary

House Bill 542 proposes to increase the per-gallon excise tax on gasoline, diesel, and special fuels while also instituting new annual taxes on electric and hybrid vehicles in Louisiana. The legislation details a multi-year increment for fuel taxes, beginning with a new tax of 7 cents on diesel starting August 1, 2019, increasing progressively to a projected 24 cents by July 1, 2031. Gasoline and special fuel taxes will follow a similar incremental approach, beginning from a level of 16 cents per gallon and potentially increasing to 34 cents over the same period. This measure aims to enhance state revenue dedicated to transportation infrastructure enhancements.

Sentiment

The sentiment regarding HB 542 appears to be mixed among legislators and the public. Proponents emphasize the necessity of adequate funding for essential transportation infrastructure, arguing that improved highways support economic growth and public safety. On the other hand, critics express concerns about the rising costs imposed on drivers, particularly in the context of already high fuel prices and economic pressures on families and businesses. This divergence indicates ongoing tensions in policy focus between fiscal needs and economic realities for constituents.

Contention

A point of contention within the discussions surrounding HB 542 includes the appropriateness of increased taxation on essential goods, particularly as Louisiana continues to grapple with budget constraints and economic challenges. Opponents of the tax increments argue that continuously burdening consumers with additional taxation is an ineffective strategy for achieving long-term infrastructure viability. They advocate for alternative funding solutions that do not disproportionately impact low- and middle-income families. The bill’s passage could thus mark a critical shift in the balance between funding necessities and consumer capacity.