- Associated Press - Wednesday, March 12, 2014

FRANKFORT, Ky. (AP) - A divided Kentucky House passed a revenue bill Wednesday that would raise the state’s motor fuels tax to supply more money for road projects, drawing objections from Republicans who signaled it could resurface as a campaign issue in the fall.

The measure - a component to balancing the state budget - deals with a number of revenue matters, but the debate focused on the gas tax.

The bill would raise the tax at the pump by 1.5 cents a gallon. The current gas tax is 30.8 cents per gallon, which automatically took effect at the start of 2014. The increase would restore the tax to the level in place at the end of 2013, less than three months ago.

The state’s gas tax is tied to the average wholesale price of motor fuels, allowing it to shift up or down or stay unchanged every three months.

House GOP Floor Leader Jeff Hoover said Kentuckians have paid a higher state gas tax for years as wholesale fuel prices rose.

“We told the people of Kentucky that if the wholesale price went up and the state taxes went up, they went up,” Hoover said. “But we also assured them … that when they went down, they would just go down.

“We’re going back on what many of us in this chamber and in the General Assembly told the people of Kentucky.”

A key House Democrat said the extra revenue would support needed transportation projects, creating more jobs.

The bill would adjust the gas tax formula by increasing the minimum wholesale price. Gov. Steve Beshear proposed the change in January to supply additional revenue for road and bridge work across the state.

Hoover tried to block the change, but his amendment failed on a near-party-line vote. Most Democrats opposed it and most Republicans supported it.

Afterward, Hoover signaled the issue could return in this year’s fall campaign, when all 100 House seats are on the ballot. Republicans are expected to mount a strong challenge statewide to Democrats who control the House.

“I think the people of Kentucky want to know who voted to increase their gas tax and who voted to try and lower their gas tax,” Hoover said. “I think that’s an important issue.”

During the debate, House Appropriations and Revenue Committee Chairman Rick Rand said the bill would generate tens of millions more in revenue to build and improve roads. Rand, D-Bedford, said counties would be deprived of badly needed road money without it.

He said the harsh winter in Kentucky has taken a toll on roads.

“I’ve hit potholes from Bedford to Frankfort every day,” Rand said.

House members voted 53-44 to pass the revenue bill, divided again mostly along party lines. The bill now goes to the GOP-led Senate.

House Speaker Greg Stumbo said later he didn’t think the gas tax would surface as a potent issue for Republicans in the fall campaign. The Prestonsburg Democrat said gas prices are high because oil companies are reaping huge profits.

“That was just a profiteering position for the big oil companies,” he said of Hoover’s amendment.

The revenue bill also would restore a tax on Instant Racing gambling machines. It came after the state Supreme Court ruled last month that Kentucky can license and regulate the slots-like games. But it returned the case to a lower court for more arguments on whether Instant Racing qualifies as a horse race or is illegal gambling.

Instant Racing games allow people to bet on the outcome of old horse races without knowing which contests they are betting on. The game is offered at Kentucky Downs in Franklin and Ellis Park in Henderson.

Meanwhile, the House was expected to take up the state budget on Wednesday, but the debate was postponed until Thursday. The approximately $20 billion, two-year plan that emerged from the House budget committee closely resembles the governor’s spending recommendations.

Hoover said House Republicans are in near lockstep against the budget. He questioned whether some Democrats were having second thoughts.

Democratic House Floor Leader Rocky Adkins said the delay was due to the longer-than-expected debate on other bills Wednesday.

He expressed confidence that budget bill has enough votes to pass.

“I think we put together a good budget under the budget constraints that we’ve been under,” he said.

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The revenue legislation is House Bill 445.

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