State Gas Taxes: What a Difference a Year Makes!

Fox News ran two articles on the climate for increasing state gas taxes, almost exactly a year apart. The 2012 article is pessimistic about the ability to increase gas taxes while the March 14th one is decidedly upbeat. Why the change, what happened?
March 20, 2013, 10am PDT | Irvin Dawid
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While neither is written by Fox, their editors did title them - and there may be more of a story in the media's outlook on increasing state gas taxes, be they excise or sales taxes on gasoline, than reality would indicate.

To answer the question, though, is that Wyoming happened. It would seem that with Gov. Matt Mead's signing of a bill on Feb. 15 that increased the gas tax by 10-cents, the media may recognize that although difficult, states can and will increase the gas tax with strong political leadership. 

In fact, two of the same states are mentioned in both articles, which could lead one to believe that progress may not being made in having states' approve gas tax increases. However, legislative progress is being made in at least two states.

The pessimistically titled March 5, 2012 article by AP, "States finding tough climate for gas tax proposals" describes efforts by Arkansas, Iowa, Maryland, and Michigan.

The Arkansas measure was not a gas tax but a general sales tax for transportation and passed with 57% of the vote on Nov. 6.

The upbeat March 14, 2013 article by Reuters, "Why Gas Taxes are Coming Back Into Fashion" includes MarylandMichigan, New Hampshire, Pennsylvania, Vermont, and Wyoming. 

There is a huge difference between having a governor or legislator propose a gas tax increase and having it pass the legislature and be signed by the governor. An excellent case is Minnesota, under then-Gov. Tim Pawlenty, who vetoed the legislature's passage of gas tax increase bills three times. The third veto occurred a year after the 2007 collapse of the I-35W bridge over the Mississippi River, killing 13 people. While over-riden by the legislature, a dear price was paid by the Republicans who joined in the over-ride.

So - will we see any states follow Wyoming's lead and have state legislature's pass an increase in the gas tax - be it an excise or sales tax on gas, and have the governor sign? Stay tuned, and keep an eye on New Hampshire and Vermont where gas tax bills have made legislative progress.

Do note that the three-cent increase in the California gas tax approved on March 1 was not done by the state legislature but by the Board of Equalization.

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Published on Thursday, March 14, 2013 in Fox Business
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