June 28, 2017

How Long Has It Been Since Your State Raised Its Gas Tax?

brief

Read this policy brief in PDF.

Many state governments are struggling to repair and expand their transportation infrastructure because they are attempting to cover the rising cost of asphalt, machinery, and other construction materials with fixed-rate gasoline taxes that are rarely increased.

The chart accompanying this brief shows (as of July 1, 2017) the number of years that have elapsed since each state’s gas tax was last increased.[1] Among the findings of this analysis:

  • Nineteen states have waited a decade or more since last increasing their gas tax rates.
  • Thirteen states have gone two decades or more without a gas tax increase.
  • Three states have not increased their gas tax rates since the 1980s or earlier: Alaska, Oklahoma, and Mississippi.

Gas taxes cannot provide adequate revenue for transportation infrastructure projects unless their tax rates are adjusted to keep pace with rising construction costs, and to offset revenue losses from improvements in vehicle fuel-efficiency. State gas tax rates that have not been updated in many years, or even decades, have seen significant declines in their purchasing power. Those declines are negatively impacting funding of economically vital infrastructure projects.

Fortunately, however, many states have recently made significant progress in updating their gas tax rates. In total, lawmakers in 24 states have raised or reformed their gas taxes since 2013.[2] This includes states that had resisted doing so for decades such as Iowa, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, South Carolina, and Tennessee.Gas taxes cannot provide adequate revenue for transportation infrastructure projects unless their tax rates are adjusted to keep pace with rising construction costs, and to offset revenue losses from improvements in vehicle fuel-efficiency. State gas tax rates that have not been updated in many years, or even decades, have seen significant declines in their purchasing power. Those declines are negatively impacting funding of economically vital infrastructure projects.

[1] These figures are based on the date that each gasoline tax increase took effect, rather than the date on which it was signed into law.

[2] Davis, Carl. “Gas Tax Increases Continue to Advance in the States.” Just Taxes Blog. May 10, 2017. https://itep.org/gas-taxes-increases-continue-to-advance-in-the-states/


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