For the first time in years, there is a mutual agreement by state lawmakers across the country to generate more revenues to fund infrastructure improvements. The most common way to accomplish this is by raising taxes on gasoline and diesel fuel paid by consumers at the pump.
Believe it or not, but tax experts are saying 2017 would be a good time for states who have not had gas tax increases in decades to take the plunge because the hikes would likely get approval from state legislatures.
According to Reuters, Carl Davis, a research director at the non-partisan Washington D.C.-based Institute on Taxation and Economic Policy says three factors, including low gas prices, a crumbling transportation infrastructure, and a “post-election period” that allows politicians a little breathing space to take on controversial issues, have given a breath of life to the effort to raise the taxes.
Davis added that in all, 21 state legislatures will be considering legislation centered on raising gasoline taxes this year. And some states have been dragging their feet for years. New Jersey last increased gas taxes 26 years ago, and Alaska last raised its gas tax 46 years ago.
“There has been a lot of procrastination,” Davis said. “It’s an issue that the states cannot put off any longer. There are 21 states which have gone a decade or more since the last time they increased their gas tax rate. These states have some catching up to do.”
Our transportation infrastructure
What is transportation infrastructure? It is the fixed installations in each state, including roads, railways, airways, waterways, canals and pipelines. It includes terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots and seaports.
These fixed installations are used by a variety of vehicles, including automobiles, bicycles, buses, trains, trucks, people, helicopters, watercraft, spacecraft, and aircraft. And don’t think for a minute that all these structures aren’t important. The upkeep, repairs, and improvements to all our transportation infrastructure is essential to our economic growth and well-being.
During the presidential campaign, Donald Trump called for a $1 trillion investment in infrastructure. But most state lawmakers on either side of the aisle aren’t sure of the role states and localities will need to play in ensuring progress is being made on transportation infrastructure and what Trumps’s priorities may be.
Darrell Steinberg is a longtime state legislator and state Senate president in California. He believes it is up to the states and individual cities and localities to take their destiny into their own hands rather than wait for Mr. Trump to decide what he means to do with a $1 trillion investment. Steinberg suggests that states should “push the envelope in seeking ways to achieve a balance between current needs and where the future lies.”
Gas tax increases – Where are we now?
Momentum leading to raising gas taxes began in 2012 and since then, 19 states has raised their gasoline taxes, including Massachusetts, Maryland, Vermont and New Jersey. Wyoming raised its gas tax in 2013 and Idaho and Nebraska in 2015. Alaska, Oklahoma, Mississippi, South Carolina and Tennessee – states that voted for President Donald Trump in November are debating raising gas taxes this year.
“As funds and their purchasing power have been depleted over the last few decades, states are coming to realize they have to raise revenues to maintain the transportation assets they have,” Kevin Pula, a policy specialist at the National Conference of State Legislatures, told Reuters.
In Part 2 of Transportation Infrastructure, we’ll delve into the states where gas tax debates are taking place this year.
