Over the past three years, 17 states have increased their gas tax to generate additional revenue for surface transportation. In almost every state the recent increase was the first in nearly two decades. Even with the passages of last year’s FAST Act, states are still facing uncertainty when it comes to funding sources. Cars are becoming more fuel efficient, driving habits are changing and consumers are seeking out vehicles that run on alternative energy sources while most states’ gas taxes are not tied to inflation—and therefore lose value with each passing year.
As we look to the 2017 legislative session we expect many states will take up legislation to address increasing revenue that can be invested into their roads and bridges. The gas tax increase is the most commonly discussed methods and we can expect to see legislation in states like Indiana and Tennessee. Both of these states have tried in prior legislative sessions to move the needle on a gas tax increase and 2017 might be the year they succeed. . In 2015, another odd-year legislative session, we saw increases signed into law in nine states (at that time North Carolina signed a bill that will raise its gas tax but, only after it initially dropped the rate by a penny).
Missouri and Wisconsin again find themselves at an impasse when it comes to investment in their transportation system. Missouri attempted to increase its gas tax during its 2016 legislative session with a bill passing only one chamber. The state later included a 23-cent cigarette tax increase to fund roads and bridges on its November ballot which was ultimately defeated. Wisconsin on the other hand approved a lockbox to protect its transportation funding coffers but, has not be able to reach consensus on how to best fund road and bridge projects, maintenance and improvements.
Another state to watch in 2017 is Colorado, which will launch a four month vehicle-miles traveled (VMT) pilot. They will join pilot programs currently underway in California and Oregon. We can also expect to see programs pop up in many east coast states in the upcoming year as they vie for federal funding to determine the viability of interstate VMT programs.
ASCE recommends that adequate funding for operating, maintaining, and improving the nation's transportation system be provided by a comprehensive program with sustainable dedicated revenue sources. We will keep a watchful eye on these states as they move to close their transportation funding gaps and improve their transportation network.
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