There is a 3rd option. Keep the fuel tax a fixed number per gallon, 24.5 cents. Adjust that with a CPI increase or decrease each year with caps so it doesn't go up or down too fast. So next year could be 25 cents or perhaps 25.5 cents per gallon. The amount of funds wouldn't keep going down in value each year based on inflation.
The other two options, in my opinion, will not pass both houses. if it is sales tax, we could double the amount going to the state per gallon in a year if gas prices go back to $4 per gallon. It is too unstable with the potential of fast tax increases or leaving the state and local governments hurting for road funds again. .
Raising the fixed rate by 5 cents is a 20% increase for the tax. That doesn't fly with most voters where I live. Raising it by 10 cents or 41% increase is even worse.
We have, dozens of cities that want more money from the state for their local roads. You do realize 30% of the state fuel tax goes to the local cities, etc. for local roads. They have been raising local property taxes or cutting police or fire to cover the shortfall. They either want more money from a larger fuel tax or permission to raise local sales tax for this purpose.
Under Utah Art XIII sec. 5, 6 the State Fuel tax has to go to roads or drivers training or UHP or debt re roads. It doesn't go in a general fund. The Utah Legislature hasn't raised it a little based on CPI for many years.
The fuel tax doesn't go to the UTA. It does go to UDOT.
UTA gets its funding from local sales tax, specifically voted on to fund UTA. It has also received funds from the Federal Government.
Approx. 17% of the sales tax collected in Utah is transportation based, including cars, tires, oil, etc. Approx. that percentage of the state portion of that tax goes to roads. See again Utah Art XIII sec. 5, 6 . Those electric cars are paying into the road fund. The Governor in 2011 vetoed a bill, which sends this money to roads, which was passed again in a veto override session by the legislature. In his current budget, the Governor proposes to use this money for something else, but that would require the law to be changed, which based on Utah Constitution, Art. XIII, Sec. 5, (6), it likely will not.
This transportation based sales tax is general fund money that normally could be used for any other state program.
The State Income Tax, goes to K-12 Public Education and also Higher Education. Utah Art. XIII, Sec. 5 (5).