Fuel tax rate changes sought in multiple states

During the past seven years, about 30 states have raised or reformed their fuel tax rates. Legislators from Louisiana to Wyoming hope to add their state to the list in the coming months.

The Owner-Operator Independent Drivers Association believes increasing the fuel tax is the most equitable way for states to generate additional revenue.

Kentucky

One Kentucky state legislator says he will renew his quest of additional funding for road and bridge work throughout the state.

During the 2020 regular session, Rep. Sal Santoro, R-Florence, introduced a bill to help address a $500 million backlog of maintenance work through increases to the state’s fuel tax rates and vehicle registration fees. All components of the tax and fee increase effort were estimated to raise about $483 million annually.

Kentucky now collects 26 cents per gallon on gas purchases. Diesel purchases net the state 23 cents per gallon.

The 2020 bill called for raising the gas tax by 8.6 cents to 34.6 cents. The diesel rate would be increased by 11.6 cents to 34.6 cents.

An additional surtax of 4.3 cents for gas and 7.2 cents for diesel would also be tacked on to fuel purchases.

The bill failed to win approval at the statehouse, but Santoro is hopeful a renewed effort will advance to the governor’s desk.

Louisiana

State Rep. Jack McFarland, R-Jonesboro, is calling on legislators to get behind his pursuit of a fuel tax increase to help address a $14 billion backlog of road and bridge needs.

Louisiana now collects a 20-cent tax on each gallon of fuel sold in the state.

McFarland’s plan would more than double the tax over 13 years. Initially, the tax would increase by 10 cents. Additional 2-cent increases would occur every two years through 2033. At that time, the tax would reach 42 cents per gallon.

Once fully implemented, the tax is estimated to raise nearly $1 billion annually

Missouri

Two bills at the Missouri statehouse would raise the state’s excise tax by 10 cents to 27 cents.

The state’s Department of Transportation has said there is an $825 million gap in annual road and bridge funding. Transportation officials say a dire situation to fund road and bridge work will only worsen until legislators get a deal done.

Senate President Dave Schatz, R-Sullivan, is behind one of the bills. SB262 would phase-in the increase over five years. Starting July 1, 2021, the tax would be increased by 2 cents annually through 2025.

Voters would make the final decision on the issue in a statewide referendum.

One House bill calls for the same rate increase.

Sponsored by Rep. Steve Butz, D-St. Louis, HB114 would increase the fuel tax on Jan. 1, 2022. The rate would be increased by 2 cents annually through 2026.

Wyoming

For the third year in a row in Wyoming, legislation will be offered to enact a fuel tax increase.

The state’s current tax rate is 24 cents per gallon.

During the 2020 regular session, a bill sought to raise the tax rate on gas and diesel by 3 cents to 27 cents per gallon. The measure also included a provision to adjust the tax rate on the consumer price index.

A year earlier, legislation did not call for an increase in the tax rate but it did allow for indexing every two years.

The Joint Revenue Committee recently backed a proposal to increase the tax on gas and diesel by 9 cents. The tax on alternative fuels would be raised by the same amount.

The Wyoming Department of Transportation reports $135.6 million in unfunded operating expenses. The amount includes $72.3 million in construction and maintenance. LL