When it comes to infrastructure funding, peer pressure isn’t a bad thing. Over the last several years 19 states have taken it upon themselves to generate new revenue to fund their surface transportation infrastructure. While 2016 session did not rise to match the flurry of activity seen in 2015, and years prior, many states did take that time to consider and debate the proposals that have been queued up this year.
This year will see California, Colorado and Washington dive a bit deeper into their vehicle-miles travel pilot programs as an alternative to a gas tax only revenue stream. We are also following transportation funding legislation in a number of states:
- Arizona’s legislature is considering a bill that will raise the current 18-cent per gallon gas tax by 10-cents. If enacted, it will be the first-time Arizona has increased its gas tax in 26 years. It is estimated that the purchasing power of the current gas tax has diminished by about 50% since the last increase.
- Indiana has debated the possibility of a gas tax increase over the last few years. This year the legislature is debating a 10-cent per gallon gas tax coupled with an increase in vehicle registration fees, an electric vehicle fee as well as a requirement that the state study toll roads. This proposal has the potential to generate the projected $1.2 billion per year needed to maintain state and local roads.
- New Mexico is debating a bill that will expand the current local gasoline tax to all municipalities and counties across the state. Creating an opportunity for local governments to enact a special fuel tax of no more than one-cent per gallon with a five-cent per gallon maximum has the potential to raise an estimated $40 million for county and municipal roads.
- The Oregon Legislature has released a joint plan whose goals include protecting existing infrastructure, preparing the transportation system for a seismic event, improving public safety by replacing or repair gaining structures, and improving public transportation. The state looks to accomplish their task list by generating revenue through a number of possible stream from the user fees like the gas tax, tolls and vehicle registration to optimizing general revenue streams like the lottery, property taxes and diversions from the general fund.
- South Carolina, like Arizona and Indiana, is also considering a 10-cent per gallon gas tax increase. South Carolina is currently ranks among the lowest gas tax in the nation. If passed, this increase is expected to cost drivers an additional $60 per year in fuel costs. While South Carolina’s drivers may see a slight uptick in the price at the pump, improving road conditions and capacity has the potential to put a dent in the $1,168 - $1,248 per year in additional vehicle operating costs.
- Tennessee’s IMPROVE Act has the potential to raise the gas tax by 7 cents per gallon and index the rate to the Consumer Price Index. This bill will also increase vehicle registration fees and allow for a local option tax to fund local projects. This approach has the potential to help Tennessee begin to close a potential funding shortfall.
Stay tuned as these critical bills wind their way through the legislature. Closing the funding gap now can help save families $3,400 per year, or $9 per day, in costs related to poor infrastructure conditions. If your state made the list of those we’re watching, we encourage you to take action now by contacting your State Legislators and urging them to invest in your roads and bridges today!
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