Drivers in 12 states who hit the road during this summer driving season will be paying more in gas tax beginning Monday, July 1.
While the federal gas tax has remained stagnant for nearly 26 years, many states have stepped up and increased their taxes so they can raise revenue to fund infrastructure and other projects. California, Indiana, Maryland, Michigan, Montana, Nebraska, Ohio, Rhode Island, South Carolina, Tennessee and Vermont all will raise their gas taxes.
The most significant of those increases will occur in Illinois, where the gas tax will rise by 19 cents per gallon. This will mark Illinois’s first gas tax increase since January 1990, nearly 30 years ago. Two of these states, Ohio and South Carolina, decided to boost their Earned Income Tax Credits (EITC) to offset some of the impact of higher gas taxes on those families least able to afford the tax.
“The progress we’re seeing at the state level stands in stark contrast to the lack of action at the federal level,” said Carl Davis, research director at the Institute on Taxation and Economic Policy. “This should be an issue that lawmakers across the political spectrum can agree on, but instead, Congress has done nothing.”
Despite renewed interest among some federal lawmakers, proposals to raise the federal gas tax continue to go nowhere. The federal gas tax is more outdated than it’s ever been, and by fall, we will have seen 26 years pass without an update. The last time the nation went this long without changing the gas tax rate, President Reagan signed a bill that more than doubled the tax.
A stagnant gas tax means an erosion in the revenue needed to fund vital infrastructure projects.
See ITEP’s latest resources on the gas tax:
- Gas Taxes Rise in a Dozen States, Including an Historic Increase in Illinois
- Chart of July 1 gasoline tax rate increases in 12 states
- Chart of July 1 diesel tax rate increases in 11 states
- Most Americans Live in States with Variable-Rate Gas Taxes