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State Gas Tax Outlook Grim - Or Is It?

Two articles from non-profit organizations - a think tank and an advocacy group, seemingly arrive at the same conclusion: the future of the state gas tax is grim due to lack of political will to raise it. However, some states are bucking the trend.
February 6, 2013, 10am PST | Irvin Dawid
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Both Daniel C. Vock, staff writer for the Daily News Service of the Pew Center on the States and David Goldberg, communications director for Transportation for America explain the difficulty in raising state gas taxes and, paradoxically, the desire by governors to raise additional revenue to meet transportation needs.

"At bottom, the recent move away from gas taxes as the go-to source of transportation funds is a nod to new realities: Their earning power is shrinking every year, and car-dependent voters will not stomach increases commensurate with their desire for a robust transportation network", writes Goldberg.

Both writers focus on Virginia Gov. Bob McDonnell's plan as it is the most watched and the most extreme because unlike proposals in Massachusetts, Maryland, Missouri, Texas and Indiana that find alternative revenue options that would supplement the existing gas excise tax, McDonnell proposes to do away with the state gas tax.  The aforementioned states seek variations of income and general sales tax increases/decreases and using surplus funds.

However, for those who want to see the nation invest in its infrastructure, the revenue source may be less important than the investment itself.

“All of these governors are getting creative,” says Marcia Hale, president of Building America’s Future, a group that supports more spending on infrastructure. “They think, at the moment, that (the gas tax) is a political non-starter and they need to find ways to do things.”

However, Vock's more comprehensive list of state transportation funding options contains what one might not expect to see - states proposing gas tax increases.

The Wyoming House passed a 10-cent hike, which would be the state’s first fuel-tax hike since 1998. A competing proposal in the Senate to use severance tax money has stalled. In New Hampshire, Democrats in the state House are weighing a proposal to hike the gas tax by 12 cents over three years.

Pennsylvania Governor Tom Corbett, a Republican, is widely expected to announce a hike on the taxes gas stations pay for fuel, as the cornerstone of his $1.9 billion transportation funding package. Pennsylvanians are evenly split on the idea, according to a recent Quinnipiac University poll but four out of five predict they will pay more for gasoline if it passes.

And while Ohio Governor John Kasich is not seeking a gas tax increase, he does propose a user fee increase - to "increase tolls on the Ohio Turnpike and use the new revenues to back bonds, which would pay for improvements chiefly in northern Ohio where the toll road runs."

The year is young.  It may be too soon to give-up on state gas taxes.  One thing is clear though: new transportation revenue strategies, be they user or non-user based, will be coming from the states, not the federal government.

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Published on Friday, February 1, 2013 in Stateline
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