BOISE — Idaho farm organizations are being encouraged to have their voices heard on the suddenly hot topic of increasing transportation funding.

A flurry of proposals to raise some of the additional $262 million a year that a governor’s task force says is necessary to adequately maintain Idaho’s roads and bridges have been floated in the Idaho Legislature.

Food Producers of Idaho, which represents 40 of the state’s largest farm groups, told its members that agricultural groups need to let lawmakers know which of the proposals they can and can’t support.

“We’re asking agriculture to participate more in the discussion on transportation funding,” said Milk Producers of Idaho Executive Director Brent Olmstead, a member of FPI’s transportation committee. “They need to hear from us.”

Many of the proposals that have been floated include a 5-cent increase in the state gasoline and diesel tax, a modest increase in registration fees and a limited amount of one-time money from the state’s general fund.

Most of them also include a 2-cent a gallon increase in the state’s transfer fee, which is charged on all petroleum products in Idaho when the fuel is moved from bulk storage tanks. It is currently 1 cent a gallon and paid by the distributor but passed on to whoever purchases it.

Several farms groups have already sent lawmakers letters saying they generally support modest increases in the fuel tax and registration fees but are opposed to increasing the transfer fee and using the money to fund road and bridge maintenance.

In a letter to House and Senate leadership, Idaho Farm Bureau Federation President Frank Priestley said the fee was intended to mitigate leaking underground storage tanks.

“Since all fuel can potentially be stored in underground tanks, there is a reasonable nexus between this fee and levying it on all fuel, including off-road fuel,” he said. “However, to increase this fee on all fuel and use the money for road maintenance and construction is setting the precedent of taxing off-road fuel.”

Off-road fuel, also known as dyed or farm diesel, is exempt from state and federal fuel taxes and allowed in vehicles that are not used on public roads.

Taxing off-road fuel to fund road maintenance, Priestley said, would “be comparable to forcing non-smokers to pay a cigarette tax or non-drinkers to pay a beer and wine tax.”

Farmers use a lot of fuel in equipment that doesn’t operate on roads, Priestley said.

“While we are willing to pay our share of transportation funding consistent with other users, we are opposed to taxing fuel that is used off-road,” he said. “Since this fuel is not used on roads, it should not be subject to taxes which pay for roads.”

Olmstead said MPI could support several reasonable proposals to raise transportation funding.

“What we cannot support is an increase in the transfer fee for dyed diesel,” he said. “There’s no logical, rational nexus in that.”


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