Talks about changes in fuel tax collection continue in state houses across the country.
The Owner-Operator Independent Drivers Association believes that increasing fuel taxes is the fairest way for states to generate additional revenue.
The following is an overview of some key efforts to adjust fuel tax rates.
Alaska
An Alaska House bill would increase the state’s fuel rate for the first time in half a century.
Sponsored by Rep. Andy Josephson, D-Anchorage, the bill would double the 8 cent tax to 16 cents.
The 0.95 cents surcharge added to the tax would also increase to 1.5 cents per gallon.
Josephson said in prepared remarks that the current tax rate is well below the inflation adjustment since 1970. He points out that the tax rate imposed 51 years ago should be set at 54 cents today if adjusted.
“Alaska’s fuel tax has lost 85% of its purchasing power since it was last amended,” said Josephson.
HB104 is on the House Transportation Committee.
Kentucky
Two bills at Kentucky House are said to increase fuel prices in the state.
Kentucky is now raising 26 cents a gallon on gas purchases. Net diesel purchases by the state are 23 cents per gallon.
Taxes are tied to wholesale fuel prices, which allows for regular adjustments. Since 2016, however, a “floor” has been introduced to prevent rates from falling.
As a result, the rates have remained unchanged.
The bill would remove the link between fuel taxes and wholesale fuel prices.
Instead, the tax rates would be adjusted annually based on a federal construction index. The initial base rate would add 4.3 cents per gallon for gas and 7.2 cents for diesel.
HB508 is on the House Transportation Committee.
A separate bill would increase fuel tax rates and other vehicle charges.
HB561, sponsored by Rep. Sal Santoro, R-Florence, would increase the gas tax rate by 8.6 cents to 34.6 cents. The diesel tariff would be increased by 11.6 cents to 34.6 cents.
An additional tax of 4.3 cents for gasoline and 7.2 cents for diesel would also be levied on fuel purchases.
A cost reduction associated with fuel tax rates would prevent the levying of the additional motorway tax on gas and diesel purchases. The fee is one nickel for each gallon sold.
After all the staff changes, the new gas tax rate would be 33.9 cents and the diesel rate 36.8 cents.
Tax rates would also be adjusted annually based on a federal construction index.
Louisiana
In Louisiana, lawmakers plan to continue efforts to more than double the state’s 20-cent fuel tax rate.
Jack McFarland, R-Jonesboro, has announced plans to introduce a bill to increase excise tax by an initial 10 cents. Additional increases of two cents would be made every two years through 2033.
If fully implemented, the tax rate would reach 42 cents.
Each further increase in the penny is estimated at about $ 30 million.
Approval in the statehouse would require a two-thirds majority.
Louisiana Department of Transportation and Development Governor John Bel Edwards and Shawn Wilson previously announced their support for a fuel tax hike. However, this year both officials have indicated that it doesn’t seem like the time is right. You quote the weak economy.
Massachusetts
The Massachusetts Statehouse prosecution would increase the 24-cent fuel tax rate over three years.
The almost 50-page transport bill contains a provision to increase the tax rate by 4 cents in 2024. Two additional annual increases of 4 cents would take effect in 2025 and 2026, when the tax reached 36 cents.
The measure is SD2315.
Mississippi
A Mississippi House bill has died to approve a nationwide referendum to raise fuel taxes.
The state’s current fuel consumption tax is 18 cents. It’s been unchanged since 1987.
House Ways and Means Chairman Trey Lamar, R-Senatobia, tabled a bill to increase the price of gas by one cent to 28 cents. The diesel tax would be increased by 14 cents to 32 cents.
HB1364 missed a deadline to move forward from the committee and effectively kill them for the year.
Another bill, which found its decline in the committee, provided for the gas tax rate to be increased by 8 cents to 26 cents. HB574 would implement the increases in increments of 2 cents over four years.
At the same time, the diesel tariff would be increased by 12 cents to 30 cents. The increases would be made in 3-cent increments.
Missouri
In Missouri, the entire Senate could consider raising the fuel tax as early as this week. The state’s 17-cent fuel tax rate has remained unchanged since the mid-1990s.
According to a tax bill attached to the bill, fuel tax raised $ 698.7 million in fiscal 2020.
State officials report the state has an unfunded need of between $ 8 billion and $ 10 billion for the transportation system.
To address the deficit, the Senate Transportation Committee voted to propose an amended bill to raise the fuel tax rate by 10 cents to 27 cents per gallon.
The increase would be gradual over five years. From January 1, 2022, the tax would be increased by 2.5 cents every two years until 2027.
The cent increase is expected to raise an additional $ 411 million annually.
Sponsored by Senate President Dave Schatz, R-Sullivan, SB262 is an opportunity for Missouri residents to request an exemption and refund.
If the bill were approved by the Senate, it would be sent to the House for further consideration.
Montana
Months after voters approved a local gas tax in the city of Missoula, the House Transportation Committee is due to consider a bill this week to abolish the tax hike.
Rep. Matt Regier, R-Kalispell, is behind a bill to repeal the 2-cent excise tax on gas purchases. Diesel fuel was excluded from the increase.
Critics of the gas tax hike say it is the wrong time to impose more taxes on motorists. Others have said the county should take steps to better manage the revenue that is already available.
To make matters worse, critics have said that the local tax just piles up when you factor in recent nationwide increases in the fuel tax rate.
Montana law approved a fuel tax increase four years ago, ultimately raising $ 49 million annually on state and local roads.
The state’s gas tax rate has since risen by 5 cents to 32 cents. A further increase in the penny will be gradual through 2023.
Similarly, the state’s diesel price has since risen by around 1.5 cents to 29.45 cents. A further increase of half a cent will be carried out over three years.
The invoice is HB464.
New Mexico
Time is running out for a New Mexico Senate bill that would increase the state’s excise tax rates.
The state now levies a 17-cent excise tax on gas and a 21-cent tax on diesel.
A bill by Senator Bobby Gonzales, D-Ranchos de Taos, would increase both rates by one penny over a five-year period. At this point the gas price would be set at 22 cents and the diesel price at 26 cents.
SB168 emerged from a Senate committee and is awaiting examination in a second committee. Legislators are expected to finish their work for the year next week.
According to a tax return attached to the bill, the tax increases would raise $ 63.6 million for state and local roads by fiscal 2025.
North Dakota
A bill halfway through the North Dakota House would raise the state’s fuel tax rate. Alternative fuel vehicle owners would also pay more.
The state now collects 23 cents per gallon on diesel and gas sold.
HB1464, sponsored by Rep. Vicky Steiner, R-Dickinson, would increase the excise tax by 3 cents to 26 cents. The original version provided for an increase of 6 cents.
In addition, road charges would be increased from US $ 120 and US $ 50 for electric and hybrid vehicles to US $ 200 and US $ 100, respectively.
The bill is on the Senate Finance and Tax Committee.
West Virginia
A West Virginia legislature wants to give truck drivers a discount on fuel taxes.
The state now levies an excise tax of 20.5 cents on fuel purchases.
The bill, sponsored by Rep. Tom Fast, R-Fayette, would require a refund for diesel fuel used by a commercial vehicle for operation outside of the state.
HB2523 is a member of the House Technology and Infrastructure Committee.
Wyoming
A bill in Wyoming House to raise the fuel tax rate by 24 cents is the first step forward.
The House Transportation Committee has decided to propose a bill to tap the source of funding and improve support for state and local road projects. In particular, HB26 would increase the tax on gas and diesel by 9 cents to 33 cents per gallon. The tax on alternative fuels would be increased by the same amount.
A change in the committee would phase the increase over three years.
It is estimated that each penny increase brings in $ 6.7 million annually.
The Wyoming Department of Transportation reports unfinanced operating expenses of $ 135.6 million. The amount includes $ 72.3 million for construction and maintenance.
The bill would bring in an estimated $ 60.3 million annually for state and local roads, according to the agency.
A tax bill attached to the bill shows that the state’s highway fund would raise approximately $ 40.2 million. Another $ 14.1 million would be allocated to county roads, while cities and towns would receive $ 5.9 million. The remaining $ 1.2 million would go to state parks.
The bill has been moved to the floor of the house. LL
Other government trends
Keith Goble, state editor for Land Line Media, follows many trends in state houses in the United States. Here are some recent articles from him.