Rep. Adam Wool, D-Fairbanks, and Rep. Louise Stutes, R-Kodiak, co-chairs of the House Transportation Committee, listen to Transportation Committee staffer Laura Stidolph introduces changes to the motor fuel tax bill at the Capitol on Tuesday. (Michael Penn | Juneau Empire)

Rep. Adam Wool, D-Fairbanks, and Rep. Louise Stutes, R-Kodiak, co-chairs of the House Transportation Committee, listen to Transportation Committee staffer Laura Stidolph introduces changes to the motor fuel tax bill at the Capitol on Tuesday. (Michael Penn | Juneau Empire)

Fuel tax hike might be stretched to 2019

A proposed hike in the state’s gasoline taxes might not reach full potential until 2019, according to a new draft of the proposal.

On Tuesday, the Alaska House Transportation Committee heard details of a new version of House Bill 60 drafted by committee staff.

As introduced by Gov. Bill Walker, HB 60 would triple Alaska’s lowest-in-the-nation gasoline tax. The state tax on a gallon of gasoline is 8 cents today. That figure hasn’t changed since 1970, though the Legislature has added other per-gallon fees.

Taxes on jet fuel, aviation gasoline and marine diesel would also be tripled. Home heating oil is not included in the tax.

Under HB 60, proceeds from the 24-cent-per-gallon tax would be designated to different parts of the Alaska Department of Transportation. Taxes collected on gasoline would go to highways. Taxes on aviation gasoline would go to airports.

The original version of the bill called for the tax to be doubled to 16 cents per gallon on July 1 this year, then increased to 24 cents per gallon on July 1, 2018.

The new version doesn’t increase the tax to 24 cents until 2019, something that Rep. Adam Wool, D-Fairbanks and co-chairman of the House Transportation Committee, said is designed to give taxpayers a chance to adjust “instead of going boom-boom, year after year.”

The draft version presented Tuesday also would allow commercial fishermen to apply for a 3-cent-per-gallon rebate from the state.

That provision was inserted by Rep. Louise Stutes, R-Kodiak and the committee’s other co-chair.

Lawmakers will consider amendments to this new version of the fuel tax and, if they agree, are expected to send it to the House Finance Committee as soon as Thursday.

While other proposed tax increases are tied up in debates about the state’s overall budget situation and may not see significant movement until the very end of the Legislative session, Wool and other lawmakers consider the fuel tax a separate issue.

Because it only raises between $40 million and $80 million per year (about 3 percent of the state’s $2.7 billion deficit) and because the money it raises is designated for transportation, there has been little organized opposition to the proposal.

Even the tax-averse Senate Majority has characterized the fuel tax hike as a “user fee” rather than a true tax.

The most significant opposition to HB 60 has come from large airlines. On Tuesday afternoon, representatives from Alaska Airlines sat down with the Empire and said their company would pay 45 percent of all proceeds generated by the tax hike.

That’s because jet fuel for international flights is exempted from state taxes, and Alaska Airlines is the largest single motor fuel consumer in Alaska.

(UPS and Delta Airlines have also opposed the hike, but for different reasons, and UPS has said it doesn’t oppose the increase in the gasoline tax.)

Joseph Sprague, senior vice president of communications and external relations for Alaska Airlines, said his company is planning to spend $100 million on a new Anchorage hangar and 11 new rural airport terminals by 2020. Because those terminals are used by other airlines at rural airports, Sprague said Alaska Airlines believes it’s already investing in infrastructure — and infrastructure investment is the stated goal of the tax hike.

In other words, Alaska Airlines feels the state is double-dipping.

Sprague said the company’s position is “challenging” because it will suffer if Alaska fails to balance its budget and plunges deeper into recession. Alaska Airlines supports a business organization called Alaska’s Future that advocates spending some of the earnings of the Alaska Permanent Fund to partially balance the budget.

“We will support that,” said regional vice president Marilyn Romano.

She said the company has met with Gov. Bill Walker to explain its position on both the fuel tax and the overall budget picture.

“He understands that this is not personal; it’s business,” Romano said. “He knows that we actually support almost everything he’s trying to do. With the exception of this one area.”



• Contact reporter James Brooks at or 419-7732.



More in News

(Juneau Empire File)
Aurora forecast for the week of Nov. 27

These forecasts are courtesy of the University of Alaska Fairbanks’ Geophysical Institute… Continue reading

Hundreds walk the waterfront near Elizabeth Peratrovich Plaza during the 2023 Juneau Maritime Festival in early May. (Clarise Larson / Juneau Empire file photo)
Survey: Residents increasingly negative about cruise tourism, but positive opinions still prevail

48% of respondents say overall impacts positive, 22% negative after record-high passenger season.

A Hawaiian Airlines plane taxis for position at Kahalui, Hawaii, on the island of Maui, March 24, 2005. Alaska Air Group said Sunday that it agreed to buy Hawaiian Airlines in a $1 billion deal. (AP Photo/Lucy Pemoni, File)
Alaska Air to buy Hawaiian Airlines in a $1.9 billion deal that may attract regulator scrutiny

SEATTLE — Alaska Airlines said Sunday it agreed to buy Hawaiian Airlines… Continue reading

Cruise ship passengers walk around in downtown Juneau in late May. (Clarise Larson / Juneau Empire file photo)
Public suggestions for spending cruise ship passenger fees being accepted starting Monday

More than $21.6M available after record season, but proposals limited to cruise-related projects.

The Hubbard state ferry (left), the newest vessel in the Alaska Marine Highway System fleet, is back in service in northern Southeast Alaska after a maintenance period as the LeConte, which also serves the region, undergoes a scheduled annual overhaul until March 3. (Photo courtesy of the Alaska Marine Highway System)
AMHS leaders hopeful staffing, sailings are trending up

More employees at key positions hired, restoration of cross-Gulf sailings next summer envisioned.

(Michael Penn / Juneau Empire file photo)
Police calls for Wednesday, Nov. 30, 2023

This report contains public information from law enforcement and public safety agencies.

A ConocoPhillips oil rig operating during winter on Alaska’s North Slope is featured on the cover of the U.S. Bureau of Land Management’s report recommending approval of the Willow oil project. (U.S. Bureau of Land Management)
Judge rejects calls to halt winter construction work on Willow oil project in Alaska during appeal

A federal judge in Alaska on Friday rejected requests from environmental groups… Continue reading

Strips of chum salmon hang on a drying rack on Aug. 22, 2007. A new study by federal and state biologists identies marine heat waves in the Bering Sea and Gulf of Alaska as the likely culprit in the recent crashes of Western Alaska chum salmon runs. (Photo by S.Zuray / U.S. Fish and Wildlife Service)
Study points to concurrent marine heat waves as culprit in Western Alaska chum declines

Successive marine heat waves appear to have doomed much of the chum… Continue reading

Marzena Whitmore (elf) and Dale Hudson (Santa), pose for a photo with Benny Orvin (partially obscured), 6, and his siblings Lilly, 4, and Remi, 2, taken by their mother Alex as their father Randy watches during Gallery Walk in downtown Juneau on Friday. (Mark Sabbatini / Juneau Empire)
Coming together as one giant community family at Gallery Walk

Thousands share an evening of entertainment in the outdoor chill, visiting shops and hot chocolate.

Most Read