Over the last few years, raising gas taxes has been a trendy answer to improving transportation infrastructure across the United States. When raising funds for improving transit, it has often been suggested that states raise the tax on gasoline and diesel fuel. This year, there are at least 9 states, according to taxjusticeblog.org, that are seriously considering raising such taxes.
There are states that have not increased the gas tax in over 20 years, and even when being discussed presently, the raise in a gas tax could likely mean a tax cut in other areas — so while transit infrastructure may receive much-needed funds, education and healthcare may take a cut. Such “tax shifting” can have more to do with reorganizing and appropriating funds than with improving conditions.
9 states where raising the gas tax will be debated this year are as follows:
Alabama – With almost 24 years since the gas tax was last raised, ‘Bama’s Governor Robert Bentley is tentatively supportive of the initiative to raise the tax but is not eager to push the issue. The state has heard suggestions for an increase as high as twelve cents per gallon with the legislature’s Joint Transportation Committee chair predicting a seventy percent chance the tax will raise.
Alaska – Along with falling oil prices, so has the state’s public revenues. Governor Bill Walker has proposed tax increases over several areas to help close gaps in the state’s budget. He looks to raise the state’s gas tax from 8 cents per gallon to 16 cents – a hundred percent increase.
California – Governor Jerry Brown has supported a 6 cents per gallon tax increase in gasoline and 11 cents per gallon on diesel fuel. His proposal has seen support from the Los Angeles Times and could have bipartisan support in the legislature. Since the state’s gas tax is dependent on the fuel price, falling oil prices have hurt the state transportation budget.
Hawaii – A 3 cents per gallon increase is proposed by this state’s governor, David Ige, while also increasing vehicle registration fees and introducing a new tax based on vehicle weight.
Indiana – The state’s House of Representatives passed legislation to raise the gas tax by 3 cents per gallon and allow the tax to raise according to inflation in the years to come. The bill is opposed by Governor Mike Pence and the state senate, and politics continue to strand this tax increase in bureaucracy.
Mississippi – The state’s gas tax has not moved in 27 years, and certain groups would like to see that change. Governor Phil Bryant supports a raise but wants to accompany it with large tax cuts across the board. However, others are against cutting taxes for general funds to raise taxes for transit infrastructure.
Missouri – The state constitution practically prevents raising taxes more than $90 million in a given year, so Governor Jay Nixon and other state officials have backed an $85 million tax increase split between gas, at 1.5 cents per gallon, and diesel fuel, at 3.5 cents per gallon. Other state officials would rather put money from other avenues into transit infrastructure – such as funds cut from state social programs.
New Jersey – The Garden State looks to raise the gas tax while possibly cutting estate taxes and expanding income tax breaks for pensioners. However, such cuts are not best suited to offset the impact of a gas tax increase on those of lower income. Governor Chris Christie, during his presidential campaign, claimed he would not raise the gas tax, but state officials are not convinced. “He does know that we are running out of money,” said Assembly Speaker Vincent Prieto.
South Carolina – A package of tax changes being considered includes a raise in vehicle registration fees and a gas tax increase of 12 cents per gallon — a tax that has not changed in 27 years. Governor Nikki Haley insists any raise in gas tax will result in tax cuts in general funds taxes. In an effort to reduce the disproportionate effect of a gas tax increase on those of lower income, an Earned Income Tax Credit has been mentioned.
Delaware has recently proposed raising the tax for a one-year trial to see where oil prices stand. In the future, states such as Oregon and Tennessee will have expanded discussion about raising gas taxes, and states such as Minnesota, Louisiana, Colorado, and Arkansas have gas tax increases floating around in the legislatures.
Overall, gas tax increases are a continuing trend when discussing state budgets and improving bicycle, pedestrian, and motor vehicle infrastructure across the nation. Whether or not we see any increases in 2016 or 2017, increases will certainly be debated into the future.