Fuel and sales taxes among road funding options explored in seven states

March 6, 2018

Keith Goble


As the feds continue to discuss an infrastructure plan released last month by the Trump administration to allocate at least $200 billion over the next decade to benefit road and bridge work throughout the nation, state lawmakers are pursuing efforts to raise revenue on their own via fuel tax and sales tax increases – among other options.

Efforts to increase various taxes in seven states are highlighted below.

The Senate Transportation and Energy Committee voted unanimously to advance a bill to permit local-option fuel taxes.

Alabama’s 18-cent fuel tax rate has remained unchanged since 1992. Statute now limits approval of a county fuel tax through passage of state legislation.

Sponsored by Sen. Arthur Orr, R-Decatur, the bill would allow county commissions to propose a local referendum to provide funding for specific road and bridge projects. Projects could be either city or county roads.

A local gas or diesel excise tax could not exceed 5 cents. The levy would sunset in a maximum of five years.
The bill, SB89, awaits further consideration on the Senate floor.

A similar House bill, HB360, is in the House Transportation, Utilities and Infrastructure Committee.

One bill halfway through the statehouse would permit counties to generate additional revenue for road work via a ballot measure. It now moves to the House.

State law now permits counties to hold elections for levy increases based on population.

SB1147 would permit the state’s 13 rural counties to impose a one-cent sales tax for road construction and repair. The levy could last up to 20 years.

Pima and Maricopa counties also could hold elections to extend their own road sales taxes before scheduled sunset dates.

Local officials are looking to raise revenue to help compensate for fewer fuel tax dollars available from the state. The state’s 18-cent fuel tax rate has not increased since 1991.

The bill awaits consideration in multiple House committees.

A House bill would raise the state’s fuel tax rate by a dime.

The state would also be allowed to impose annual fees on hybrid and electric vehicles.

Advocates say additional tax revenue is necessary to help the state address a backlog of more than $1 billion in road paving projects.
Sponsored by Rep. Sal Santoro, R-Florence, and Rep. John Sims, D-Fleminsburg, HB609 would raise $390 million annually for the state’s road fund.

The bill is in the House Appropriations and Revenue Committee.

One state lawmaker has introduced multiple bills to raise the state’s fuel tax.

The existing tax rate is set at 20 cents. Each penny raises about $30 million annually.

Rep. Steve Carter, R-Baton Rouge, is behind efforts to make a constitutional amendment permitting local voters to approve a fuel tax increase.

The constitutional amendment designation would require two-thirds support at the statehouse to permit the question to go to voters.

HB178 would apply to all locales. HB179 would apply to Ascension, East Baton Rouge, Iberville, Livingston, and West Baton Rouge parishes.

The bills are in the House Ways and Means Committee.

Talks are ongoing at the statehouse for a solution to the state’s $825 million gap in annual road and bridge funding.

The state now collects 17 cents per gallon on gas and diesel purchases.

Senate Transportation Committee Chairman Dave Schatz, R-Sullivan, is behind one of the bills. His bill, SB734, would raise the state’s fuel tax rate by 10 cents for gas and diesel.

Each penny increase in the fuel excise tax is estimated to raise up to $40 million.

Passage at the statehouse would not make the rate increase a done deal. Voter approval would be required.

The state’s Hancock Amendment mandates that any proposed rate hike in excess of two cents must go before voters for final approval. A similar requirement is in place for efforts to add tolls.

At least nine more measures before lawmakers would increase fuel tax rates from 10 to 17 cents. Multiple measures call for a higher tax rate for diesel.

New Mexico
Gov. Susana Martinez has signed into law a bill to route new revenue for the Carlsbad Brine Well repair.

A cavern has been created by a brine well. The well is beneath portions of U.S. 285 and U.S. 62/180.

Previously SB226, the new law covers almost 70 percent of the funds necessary to prevent a possible collapse. Specifically, the funds from vehicle excise tax revenue will account for $6.4 million annually to the state road fund to remediate the well. The tax revenue now is routed to the state’s general fund.

The rest of the $10 million annually necessary for cleanup will come from the New Mexico Road Fund.

Gov. Scott Walker says he is willing to look at raising the state’s fuel tax to help the state meet the match necessary to access federal funds for infrastructure work.

Wisconsin now collects 32.9 cents on each gallon of fuel sold within the state.

The governor has said any fuel tax increase would need to be offset by a tax cut elsewhere.

Lucas Oil

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.