North Dakota House, Senate at odds over proposed gas tax increase

Yahoo

25-04-2025

A Bismarck gas station displays the current per gallon rate for fuel on March 24, 2025. (Michael Achterling/North Dakota Monitor)
North Dakota lawmakers continue to debate the first increase to the gas tax in 20 years, with the House on Friday narrowly advancing a 5-cent tax increase while the Senate unanimously defeated a separate bill with a 3-cent increase.
Supporters in the House said the increase is needed to adequately maintain roads and bridges. A 5-cent increase to the motor fuels tax, which includes gasoline and diesel, would put North Dakota at 28 cents, still competitive with neighboring states.
Members of the Senate, meanwhile, objected to raising the gas tax while at the same time trying to cut property taxes, which has been a primary goal of the legislative session.
Lawmakers debate 3-cent gas tax increase, hike in EV registration fee
'It doesn't make sense to the Senate to offer and promise property tax relief, and then we tax you on the backside of something else that everybody uses,' said Sen. Janne Myrdal, R-Edinburg.
The 5-cent gas tax proposal is contained in the North Dakota Department of Transportation budget, Senate Bill 2012. House members voted 61-31 to advance the budget, but the gas tax amendment to the bill only passed by a 47-42 margin.
North Dakota has not increased the motor fuels tax since 2005. Rep. Jon Nelson, R-Rugby, said vehicles have become more efficient in that time, leading to a leveling off or decline in overall gas tax revenue to support road projects.
'This is a fairness tax or a fairness levy,' Nelson said. 'The people who are using the roads are the ones paying for it.'
Rep. Don Vigesaa, R-Cooperstown, said the gas tax revenue is not keeping pace with the inflation the Department of Transportation is seeing with construction costs. The tax increase is estimated to raise an additional $70 million.
Supporters also said the dollars are needed to get federal matching funds for road projects.
'This is about safety, this is about fixing our roads, even our rest areas,' said Rep. David Monson, R-Osnabrock. 'We have so many needs in North Dakota.'
Others in the House urged a no vote on the tax increase, arguing that it would lead to the state spending more taxpayer money.
'This is a tax on our family, our friends and our constituents,' said Rep. Dan Johnston, R-Kathryn. 'And the state is flush with money.'
Across the hall, the Senate voted 45-0 against House Bill 1382, which would raise the motor fuels tax to 26 cents per gallon and increase registration fees for electric vehicles. It's estimated to raise an additional $42 million for counties, cities and townships to use on road projects.
'This bill would place a heavy burden on North Dakota residents since 80% of all the fuel purchased in the state is by our residents,' said Sen. Michelle Powers, R-Fargo. 'We would be asking for approximately $50 to $100 per year from our constituents, mainly affecting our rural communities.'
She also said supporters of the gas tax increase have lamented that the gas tax has not been increased in more than 20 years.
'Just because a tax hasn't been raised doesn't mean it should be raised,' she said.
The gas tax in Minnesota is 32 cents per gallon, 28 cents in South Dakota and 33 cents in Montana.
The Department of Transportation budget is going to a conference committee, which meets Saturday. The House also added to the bill $155 million in bonding to finance the four-laning of 19 miles of U.S. Highway 85, including a sensitive 6-mile stretch through the Badlands south of Watford City.
SUPPORT: YOU MAKE OUR WORK POSSIBLE
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX