DALLAS — Gasoline taxes will go up in six states on Wednesday, ranging from an additional 7 cents per gallon in Idaho to 0.35 cents in Vermont, to increase funding for local transportation infrastructure projects while the federal Highway Trust Fund continues to evaporate.
"While some drivers may view this as an unwelcome development during the busy summer travel season, the reality is that most of these 'increases' are simply playing catch-up with inflation after years (or even decades) without an update to the gas tax rate," said Carl Davis, research director at the Institute on Taxes and Economic Policy.
Eight states have approved increases in their gasoline taxes in 2015, with some set to go into effect Jan. 1, 2016, Davis said.
State lawmakers are willing to raise gasoline taxes because the commitment of Congress to adequately fund infrastructure remains uncertain, Davis said, noting that the federal gasoline tax of 18.4 cents per gallon hasn't been increased since 1993.
A total of 16 states have acted to increase gasoline tax revenues since 2013, he said.
The higher taxes in Idaho and Georgia on July 1 are a result of 2015 legislation, while Maryland's 1.8 cent increase results from a law passed in 2013. Rhode Island's 1 cent increase is the first hike triggered by an automatic inflation provision in a 2014 law. Nebraska's 0.5 cent increase and Vermont's 0.35 cent bump are automatic changes in the states' variable-rate gas tax structure.
California's gasoline tax will drop by 6 cents per gallon on July 1 while Vermont's diesel tax will fall by 4.2 cents because those states link fuel taxes to the wholesale price of gasoline, according to the ITEP analysis.
Iowa's 10 cent per gallon increase went into effect March 1, and a 6 cent increase went into effect in South Dakota on April 1.
Nebraska lawmakers overrode a veto by Gov. Pete Ricketts to raise the gasoline tax by 6 cents per gallon over four years, with the first 1.5 cent installment due Jan. 1, 2016.
Utah earlier this year became the 19th state to shift the gasoline tax to a variable structure, with a 4.9 cent increase set for Jan. 1, 2016. Future increases will be based on a formula that include fuel prices and inflation.
Georgia Transportation Commissioner Russell McMurry said the state's new transportation funding law could be the model for Congress and other states seeking a sustainable future for highway and transit funding.
"There are unique things that I think the nation can learn from what Georgia did," he said.
The new funding measure will convert the state sales tax on fuel to an excise tax of 26 cents per gallon of gasoline and 29 cents per gallon of diesel. The tax rate will be annually indexed for increased vehicle fuel efficiency and, from 2016 to 2018, to changes in the Consumer Price Index. The law levies a registration tax on vehicles that don't use gasoline or diesel and imposes a state hotel tax of $5 per night dedicated to transportation.
The new funding mix is expected to bring in some $900 million a year for state transportation projects, McMurry said.
"I want all other 49 states to say, 'What are you doing, Georgia? How are you doing this?' and I can tell you right now most are keenly interested in the legislation that just passed," McMurry said.
The Federal Highway Administration said earlier this week that fiscal 2015 expenditures from the HTF totaled $29.2 billion as of May 31, with receipts of $24.4 billion from federal gasoline and diesel tax and other revenues dedicated to the transportation fund.
