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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