December 14, 2011

Building a Better Gas Tax

report

State gas taxes are currently levied in every state, and are the most important source of transportation revenue under the control of state lawmakers. In recent years, however, state gas taxes have fallen dramatically relative to the rising cost of asphalt, concrete, labor, and everything else that goes into maintaining a transportation network. The results of this decline have been both predictable and disastrous. Each year, states’ crumbling infrastructure, inadequate transit systems, and congested roadways cost residents billions of dollars in vehicle repairs and lost productivity. These costs will likely grow dramatically in the years ahead.

This report provides new 50-state data showing exactly how much state gasoline and diesel taxes — adjusted to account for growth in transportation construction costs — have declined in recent years. The tax rate changes needed to off set those declines, and the revenue implications of those changes, are also provided for every state. Overall, this report shows that the states are losing over $10 billion in revenue each year as a result of failing to plan for transportation cost growth since the last time they raised their gas taxes.

In addition to describing how states’ transportation infrastructure has fared in light of this decline, the report also makes the case for why gas taxes should remain an important component of state transportation finance, and concludes with three specific recommendations. Taken together, those recommendations would allow states to generate a more adequate and sustainable stream of transportation revenue over the long-term, without unduly impacting low-income families that have fallen on hard times.

Read the Full Report (PDF)

See the Special “Building a Better Gas Tax” Landing Page



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