Senate sets up gas tax showdown

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FRANKFORT, Ky. (AP) — Kentucky drivers could find out this week if they will pay more at the pump this summer.

House Democrats have approved a 1.5 cents-per-gallon increase. It would give the state an extra $107 million during the next two years to build new roads and fix the broken ones.

But Senate Republican leaders rejected the gas tax increase Tuesday, arguing Kentuckians do not want to pay more taxes for any reason.

Neither side has backed down, setting up a showdown this week as House and Senate negotiators are scheduled to discuss a compromise on the state's $20 billion biennial budget. Lawmakers have to reach an agreement by Monday in order to leave time in the session to review Democratic Gov. Steve Beshear's vetoes.

The tax increase could be a tougher sell in the House, where Democrats have a narrow majority. A vote to kill the gas tax increase in the House failed by two votes earlier this month. Four Democrats voted with 44 Republicans against the increase.

With Republicans threatening to take control of the House in November, some Senate leaders hoped the close vote in the House would make Democrats willing to bend on the gas tax increase.

"It will be interesting to see if they choose to fall on that sword or not," said Sen. Bob Leeper, chairman of the Senate budget committee and an independent who often votes with Republicans.

But House Speaker Greg Stumbo stood by the decision on Tuesday.

Kentucky's gas tax is tied to the average wholesale price gas, meaning it can change every three months. Since January, the gas tax has fallen 1.5 cents. It is scheduled to go down another 0.7 cents on April 1. The House bill restores the tax to what it was at the end of 2013.

"We didn't increase the tax we froze the tax," Stumbo said. "As you've seen the price of gasoline has risen dramatically since January 1. That's profiteering and price gauging by the oil companies. So this money will either go to build roads in Kentucky or profits for the oil companies, one or the other."

The average price for a gallon of regular unleaded gasoline in Kentucky was $3.54 on Tuesday, the 26th highest in the country, according to AAA.

Whatever lawmakers decide will impact some road projects. Kentucky leaders have about $1 billion in state money to spend on road projects over the next two years. Democratic Gov. Steve Beshear proposed nearly $2 billion in road projects. House Democrats cut that list to $1.2 billion, using the $107 million in extra gas tax money to help make up the difference.

"There is trade-offs in all of this. There is obviously less money if you don't raise taxes," Leeper said.

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