AASHTO Journal: At Least a Dozen States Consider Possible 2015 Increases in Motor Fuel Taxes

Feb 20, 2015 | Articles

Officials in more than a dozen states are talking about possibly increasing taxes on gasoline and other motor fuels to help cover funding shortfalls for transportation infrastructure, reports a group that tracks tax developments across the country.

Carl Davis, a senior policy analyst at the Institute on Taxation and Economic Policy, wrote in a Jan. 29 Tax Justice Blog article that “when it comes to paying for infrastructure, the gasoline tax is the single most important source of revenue collected at both the state and federal levels. As a result, funding large scale improvements, or maintenance, to transportation networks usually means that the gas tax rate has to go up.”

He said six states enacted fuel tax increases or reforms in 2013, and two more in 2014. For 2015, he said governors or legislators in 12 more are “seriously considering gas tax increases.”

Those are, Davis said: Georgia, Idaho, Iowa, Michigan, Minnesota, Missouri, New Jersey, South Carolina, South Dakota, Tennessee, Utah and Washington state.

The list could be longer still. “We’re also hearing gas tax talk from legislators in Montana and Nebraska, task forces in Louisiana, research groups in Oklahoma and media in states such as Colorado and Wisconsin,” Davis added. Although he repeatedly wrote only of gas tax increases, states are usually considering plans that also increase fees on diesel and other types of fuel, plus registration fees.

Besides his list, AASHTO Journal has been reporting that officials in yet more states are considering ways to boost their transportation revenue. In at least two more – Kentucky and North Carolina – officials are discussing how to revamp their percentage-based fuel tax laws to ward off big declines in receipts due to the past year’s plunge in pump prices.

Some governors are also telling Congress that no matter what they do at the state level to increase their own transportation revenue, states still need a stronger and more reliable federal program to help catch up to a long list of backlogged projects to replace aging infrastructure or add capacity for growing populations.

In Georgia, for instance, he noted House Speaker David Ralston said a gas tax increase was possible this year and some lawmakers introduced a bill to do so. Gov. Nathan Deal has not formally proposed one, but Davis wrote the governor “has been dropping hints that he’s open to the idea.”

Idaho Gov. Butch Otter has not proposed hiking fuel taxes, but “he has supported increases in the past, and there is rampant speculation that a gas tax hike could be floated soon,” the article said. Likewise, Tennessee Gov. Bill Haslam, Washington’s Jay Inslee and Chris Christie of New Jersey – among others – have not proposed one, but the analyst in each case pointed to indicators that such revenue measures may emerge.

The report also counted the December action in Michigan’s legislature, which passed a series of tax increases with a strong push by the governor but will put them before voters to approve or reject in May.

It noted that Minnesota Gov. Mark Dayton and Senate leaders proposed adding a wholesale tax to fuel, and South Carolina Gov. Nikki Haley proposed hiking fuel taxes if combined with an income tax cut and reform of the state transportation department. South Dakota Gov. Dennis Daugaard also proposed a gas tax increase, and Utah’s Gary Herbert has said “now is the time” to raise Utah’s gas tax, Davis reported.

Article appears courtesy of the AASHTO Journal – 2/6/15

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