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Some States Want to Raise Gas Tax for First Time in Decades

Some States Want to Raise Gas Tax for First Time in Decades

Added revenue will help fix infrastructure.

With higher construction costs and low revenue from low pump sales, a few states have considered raising the gasoline tax in an effort to raise funds for infrastructure.

President Donald Trump has promised to put forth $1 trillion to fix infrastructure across the country, but state officials have realized they need to do something for themselves.

Tennesse Governor Bill Haslam (R) believes a higher tax would raise $278 million for his state.

Haslam wants “to add seven cents to the state’s 21-cents-a-gallon tax for regular gas, and another 12 cents to the 18-cents-a-gallon diesel tax.” Tennessee needs at least $10 billion to fix roads and bridges for the next 10 to 12 years:

The plan mitigates the bite of the proposed tax hike with a reduction in the state sales tax on food and ingredients, as well as tax cuts for manufacturers, an attempt to lure more businesses to the state. The proposal would steer tens of millions of dollars to county and local governments for infrastructure, winning broad support from local leaders.

Alaska Governor Bill Walker (I) has a bill to raise “the state’s gas tax to 24 cents a gallon by 2018.” Walker has stated that he needs to fix “a $3 billion fiscal gap, after state revenues collapsed by more than 80% from four years ago due in large part to the drop in oil and natural-gas prices.”

This sounds similar to Oklahoma. Governor Mary Fallin (R) would like to raise the gas tax by 7 cents and diesel by 10 cents since “low oil and gas prices have created an estimated $870 million shortfall in the 2018 fiscal year.”

The Indiana Senate will consider a bill to increase the state’s gas tax to 28 cents.

Most states have not raised gasoline taxes in decades, but that all changed in 2012:

Since then, 19 states have raised their gas taxes including liberal-leaning blue states Massachusetts, Maryland, Vermont and New Jersey. Deep red Wyoming raised its gas tax in 2013, as did fellow conservative states Idaho and Nebraska in 2015.

Even if the states do not pass their gas tax increases this year, they could still eventually become law.

“It’s very unusual at the state level to see a measure proposed and then immediately enacted,” said Joung Lee, an associate director at the American Association of State Highway and Transportation Officials.

“It usually takes several bites at the apple,” he said.

Jared Walczak, policy analyst with the Tax Foundation, said those first few states gave other states hope. Since those states faced hardly any backlash, officials in other states decided to take those same steps.

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If gas is cheaper than normal, that should mean that more gas is being sold as people go back to driving vacations and so forth. Gas Tax is based per gallon, and would have nothing to do with the actual cost of gas. The total tax is somewhere around $.55 a gallon, so more gas sold equals more money in the coffers of government. Maybe they should use all the money for roads instead of siphoning it off for their general funds.

    ConradCA in reply to TimothyJ. | February 21, 2017 at 1:51 pm

    They need to use all gas taxes for roads and bridges. Not on mass transit or boondoggles like Calif’s slow train to no where and not from GW purposes.

    Eddie Baby in reply to TimothyJ. | February 21, 2017 at 2:39 pm

    That is a novel idea, but the pols would rather raise taxes, so the have more money to give to their buddies.

    Except that cars are getting better fuel economy (partly due to government mandates) so even with relatively low gas prices and people driving more, they’re doing so on less gas than ever before.

    I actually would support higher gas taxes if I was convinced that the money would actually go toward fixing the roads. The problem is that these things inevitably end up just being added to the general fund and p1ssed away like most of the rest of the budget on “you scratch my back…” projects and paying the overhead for the legions of bureaucrats who’s primary purpose of employment is trying to justify their employment.

    Typical local, state or federal bureaucrat: “Hey, if we make these regulations completely incomprehensible to the common person in any language known to mankind, they can never fire us because they’ll need us to help them navigate the labyrinth we’ve created.”

Translation: As states continue to raid their highway funds to pay for other expenses, such as court-mandated school budget increases (See Kansas, State of), they’re starting to make that horrible slurping noise you get at the bottom of a malt. If over the last eight years, the economy had grown at the expected rate, or even somewhat below the expected rate, this would be a moot point, since state revenues would be up.

(Well, I like to think so. States can spend whatever comes in at an astonishing rate. It’s just nothing’s coming in, and the budget process is getting tight, while a lot of states have ‘no-debt’ budgets specified in their constitution. Squeek!)

Why is it that Gas Taxes end up going to teachers salaries or into the General Fund?

No. New. Taxes.

2nd Ammendment Mother | February 21, 2017 at 1:32 pm

I still remember the 1st toll road I ever road on in Oklahoma in 1972 when I was a little kid. I got to sit in Grandad’s lap and toss the nickel in the basket….. The still haven’t fixed that road.

    The tolls are going up again. I’ve heard people complaining that the OK tolls were only supposed to be there until the roads were paid off. Ha!

    A lot of stations in Oklahoma have CNG – will they get a tax increase? If you have an electric car, should your annual car tag include a road usage fee since you are not paying for the gas tax but still use the roads and bridges?

    One good point about OK gas stations is that they have to disclose what type of gas (E85, E10 or 100%).

    And…. when oil & gas is produced, the royalty owners pay a % to fund cleanup of abandoned well sites. We (OK) are giving wind farms a tax credit, but the energy in a few cases is going out of state. We have to look at the darn things while paying for it and we don’t get a benefit. In fact, one of the tax increases that Fallin is proposing is on wind energy! I wonder if there is a fund to deal with broken down turbines when the companies go bankrupt?

      nordic_prince in reply to Liz. | February 21, 2017 at 11:33 pm

      They told the same lie in Illinois – the tolls would only be in place until the roads were “paid off.” 40+ years later, we’re still paying tolls.

      Moral of the story: anytime a politician tells you that a tax is “temporary,” he’s lying through his teeth.

While they’re at it, why don’t the old bloodsuckers tell us that these projects are “shovel-ready”?

Hey, if it worked for the D’rats, it can work for the R’s, too.

I’ve always favored the idea of bonds to finance infrastructure.

If people what it, they’ll buy the bonds. PLUS, there ain’t no doubt about where the money is spent. It cannot be diverted.

Fuel taxes are a great way to raise the cost of everything consumers pay for virtually everything they buy in their state. Because diesel taxes are “apportioned” according to miles a truck runs within a state, those costs are also borne by consumers in other states.

    MattMusson in reply to Ragspierre. | February 21, 2017 at 3:31 pm

    Right now – Trillions of dollars of international money is looking for a safe way into the US Market. Infrastructure bonds with a sovereign guarantee and a dedicated revenue stream (toll roads, ports, airports, etc) would be the best way to dramatically improve US infrastructure without raising taxes.

    After Oklahoma had a few bad years with F5 tornadoes impacting schools, there was an outcry that the state should raise taxes to pay for shelters in all schools. It was voted down.

    Last week, my city passed a school bond issue which included storm shelters. Most construction is now a combined gym or band room that is also a shelter. Any new construction in growing communities includes the shelters.

    If a community can’t afford it, perhaps they should combine school districts. Oklahoma has too many districts with the added cost of all the administration.

As vehicles have become more fuel efficient, the taxes paid for per mile driven has gone down. What is the plan for electric/hybrid/bicyclists to help pay their fair share of road maintenance and development? The current system of using fuel taxes is insufficient.

    Obie1 in reply to Mark1968. | February 21, 2017 at 3:23 pm

    Aye, there’s the rub. As state and federal governments mandate more efficient vehicles, they are slowing the flow of per-gallon taxes.

      Mike H. in reply to Obie1. | February 21, 2017 at 3:35 pm

      As the taxes go up their salaries should go down. Let them feel the effect of what they mandate for everyone else.

    MattMusson in reply to Mark1968. | February 21, 2017 at 3:33 pm

    Some states are already placing a direct tax on hybrid and electric cars.

    Joe-dallas in reply to Mark1968. | February 21, 2017 at 3:41 pm

    The cost of road maintenance is correlated with the weight of the vehicle. Bicyles have virtually zero road maintenance costs (except for those stupid bike only lanes which are often more dangerous than using no bike lanes at all)

    lot of the fuel taxes pay for bike paths, urban “trolley” lines, sidewalks,etc.
    IOW not the actual roadways.

If there has been an average 10% increase in automobile fuel economy, then there has been a 10% decrease in gasoline tax revenues. State lawmakers are facing the loss of one of their cash cows.

In Minnesota, the gasoline tax funds ‘public transportation’ such as choo choo drains throughout the Twin Cities. These archaic boondoggles will ensure that gasoline taxes will never keep pace with expenses.

Hardly any backlash? Here in Maryland we have a GOP governor due, in part, to O’Malley’s love affair with taxes.

More money to steal! Yay!

buckeyeminuteman | February 21, 2017 at 2:51 pm

Trump wants to spend $1T on infrastructure? Now there’s an idea I can’t get behind. Roads, highways, bridges, ferries, etc are all the responsibility of state and local governments. We need to stop giving federal funds to education and to transportation. The fewer carrots the Federales get to dangle in front of local officials the better.

Taxed.
Enough.
Already.

I wouldn’t mind paying a little more gas tax for infrastructure, if I knew the money would actually be spent where it was meant to be spent.

But, what are the odds of that happening? Especially here in Illinois.

    Henry Hawkins in reply to rinardman. | February 21, 2017 at 7:05 pm

    We’ve already paid for infrastructure. In some states, a couple times over. In NC it’s typical for lottery, gas, and other taxes to magically end up going in part or whole to other projects once enacted and the media attention dies down.

LibraryGryffon | February 21, 2017 at 4:02 pm

The odds of the money going to the roads and bridges are even lower in Connecticut.

The north-bound span of I-95 between New London and Groton has about the lowest structural rating they’ll give and still let traffic use it. (IIRC its the lowest eating in tge entire srate.) Last year my husband’s car was nearly totalled when a piece of the road bed broke loose and took out his oil pan. If we have to close one of those two spans it will be an economic disaster, not just for the immediate region, but for any business which relies on I-95 between Niantic in CT where 395 splits off and Massachusetts. And 395 wouldn’t be able to handle the increased traffic.

In recent news reports, this survey was mentioned to show the number of bad bridges.

http://www.artba.org/deficient-bridge-report-home/

Check it out for your state. In particular, check out the types of bridges, how many are bad, how big they are and what is the traffic level.

For Oklahoma, there are 23,053 bridges in the state. 15% have been deemed structurally deficient.

But, 9,509 bridges are on local rural roads which don’t carry through traffic and are intended for short distance travel. That is 41% of the total bridge inventory. The bad rural road bridges account for 63% of the bad bridges. A few more calculations show that the average bad rural road bridge is 88 square meters and has 120 daily crossings (60 round trips per day?). So, the majority of the bad bridges in Oklahoma don’t have to be replaced until they fall down.

Let’s fix the major roads & bridges. Oklahoma has I35 (N-S), I40 (E-W) and I44 going across the state and into Missouri to St. Louis. These are major roads with lots of interstate traffic. They get pounded with the truck traffic, so they should be maintained in part with the federal gas tax revenue, especially since a truck could travel through the state without stopping for gas and paying the state gas tax.

Gas taxes should pay for the roads and bridges and not bike paths and trains.

    LibraryGryffon in reply to Liz. | February 22, 2017 at 11:44 am

    Thanks for the link. I see that that bridge is indeed on the list of structurally deficient bridges for the state.

The Illinois Transportation Taxes and Fees Lockbox Amendment was on the November ballot. This was a legislatively referred constitutional amendment designed to prevent lawmakers from using transportation funds for anything other than their stated purpose. The measure was approved with almost 79% of the vote.

Now that it’s been approved, care to guess how the Illinois legislature will enforce it? But if it were to be enforced properly, it would answer the questions many have about supporting a higher gas tax — how do I know that the money will go where it’s supposed to go?

You can read it here:

https://ballotpedia.org/Illinois_Transportation_Taxes_and_Fees_Lockbox_Amendment_(2016)

I haven’t yet looked myself, but I would not be the least bit surprised to learn that the state agencies and officials who deem bridges and roadways bad and in need of repair do so in large part after pressure from higher state officials. Everyone simply accepts their judgments – the perfect arrangement for bogus assessments and diverted funds, at least in part.

    It’s a common ploy, from national to local level. Our school district here had it down cold (sorry).
    1) Beg for money to put air-conditioning into the school because ‘children.’
    2) Get the money through bonds and taxes.
    3) Suddenly find a higher priority, spend the money on it.
    4) Repeat.

      Henry Hawkins in reply to georgfelis. | February 22, 2017 at 5:52 am

      In NC, it was the NC Lottery. They’d tried and failed for many years to enact a state lottery, rejected by NC religious folks who considered it gambling and verboten. They changed the marketing to the NC ‘Education’ Lottery – for the kids! – and got it passed. Then they started carving money out of it for things other than schools.

      Police call this ‘bait and switch’.

More people will want an EV.

1) STATE responsibility, NOT Federal. Trump should have learned from Obama’s failed Stimulus. Tell your representatives to OPPOSE this >$1 Trillion waste of money.

2) States seriously need to break the union stranglehold on these contracts. Put an end to all the laws and regulations requiring state contracts go to “prevailing wage” or “minority owned” businesses. End no-bid contracts. Government’s should be the stewards of taxpayers money, and looking out for the best deal they can get for us when contracting for this work. Instead, they massively overpay to a small clique of companies in exchange for kickbacks to their campaign coffers.

I don’t really have a problem with federal funds used on interstate highways since problems with those roads affect a lot more than local traffic and they are used by a lot of drivers not from the state the road is in. As I said in my comment above, if we lose one span of the I-95 over the Thames it will affect a lot of traffic and commerce outside Connecticut. Now, if it was the 2-A bridge over the Thames up near Norwich, that should just be state funds since pretty much all its traffic is local.

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