NCPA - National Center for Policy Analysis

States Considering Gas Tax Hikes

March 18, 2014

Strapped for cash, more states are considering raising their gas taxes, says USA Today.

  • Since the start of 2013, six states, as well as the District of Columbia, have increased their gas taxes or made changes to the way that it is collected.
  • The federal gas tax has not seen a raise since Bill Clinton's time in office, and those funds are what help states to pay for infrastructure costs.
  • Sixteen states have not raised their own gas taxes in two decades.

As prices of machinery, asphalt and steel rise -- and as Americans drive farther on less gas thanks to fuel-efficiency standards -- states are having trouble finding the funds to repair and build roads and bridges.

So far, Maryland, Massachusetts, Pennsylvania, Vermont, Virginia and Wyoming have changed their gas tax. Now, other states are looking to do the same.

  • New Hampshire hasn't raised its tax since 1991, which currently sits at 18 cents per gallon. The state is considering increasing that tax to 22.2 cents, and the governor has already announced that she will sign the bill if it is passed by the legislature.
  • Utah is looking at a bill that would alter the gas tax to match changes in gas prices. The current tax is 24.5 cents. Under the bill currently being debated, that tax would rise if the price of gas rises, but it would not fall below 24.5 cents.
  • Washington already has a 37.5 cent gas tax, but it is considering adding an additional 11.5 cents to pay for its road projects.

Politically, raising the gas tax is going to be difficult, so many states are trying to link their gas taxes to inflation or set the tax at a specific percentage per gallon, as 18 states and Washington, D.C., currently do.

Source: Larry Copeland, "Needing Money for Roads, States Mull Gas Tax Hikes," USA Today, March 11, 2014.


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