Lawmakers at both the federal and state level are saying they will consider raising fuel taxes to fund highway infrastructure projects. Many see the fuel tax, which hasn’t been increased since 1993, as the most viable way to increase revenues for highway infrastructure projects.
“We would expect to see this more as the rule rather than the exception as both federal and state transportation fund revenues face a fiscal crisis,” said Richard Harris, vice president of fleet services and operating tax for Penske Truck Leasing.
“These revenue shortfalls are broadened by the increases in the use of both fuel efficient and alternative fuel vehicles,” he added. ”Policy will dictate increases in taxes to keep pace with the country’s infrastructure needs and don’t be surprised to see rising toll prices or even new toll roads.”
Wyoming was the first state this year to raise its fuel tax, raising it to 24 cents per gallon from 14 cents on Feb. 15.
Transportation legislation passed in Virginia will make significant changes to the way fuel taxes are calculated when the law takes effect July 1. The state’s current 17.5 cents per gallon excise tax will be replaced with a sales tax on the wholesale price of fuel at a rate of 3.5 percent on gasoline and six percent on diesel.
Virginia’s Department of Motor Vehicles commissioner will establish the tax rate twice a year based on the average of wholesale price of fuel (less taxes) during the prior six months. The legislation also raises the general state sales tax from five percent to 5.3 percent with the increase going toward transportation.
Lawmakers in Michigan, New Hampshire, Washington, Pennsylvania and Vermont also have proposed increasing state motor fuel taxes to generate revenue for transportation infrastructure.
Legislators in Nevada recently introduced a bill to increase the motor fuel tax by two cents to 19.65 cents per gallon beginning Jan. 1, 2014. The bill also calls for annual increases of two cents per gallon until 2023.
In Utah, a new study issued by the Utah Foundation is calling for the state to increase its motor fuel taxes, and in Iowa several advocacy groups have said they will continue pushing for an increase in the state’s gasoline tax to better address transportation needs.
As of January, combined local, state and federal taxes range from 32.4 cents per gallon to 75.4 cents.
Story on the Penske blog: federal, state lawmakers eye fuel tax increases http://t.co/8FrjgF9uVu— Penske Transportation Solutions (@Penske Transportation Solutions) 1367933071
By “Move Ahead” Staff