In state houses across the map, lawmakers are hoping to make changes to how fuel taxes are collected.
The Owner-Operator Independent Drivers Association believes that increasing fuel taxes is the fairest way for states to generate additional revenue.
Arizona
The prosecution at the Arizona Statehouse would raise the state’s fuel tax rates for the first time in three decades.
Arizona now charges 18 cents a gallon for gasoline purchases and 26 cents for diesel purchases. Unchanged since 1991 and 1993, tax rates increase about $ 750 million annually.
HB2436 is sponsored by House Transportation Chairman Frank Carroll, R-Sun City West, and would make an inflation adjustment for fuel tax rates. The law would come into force in July 2022.
The legislation comes a year after the legislature has not approved a bill to increase gas and diesel tariffs by 6 cents a year over three years. In addition, the failed calculation called for interest rates to be indexed to allow for regular increases.
Carroll’s bill is waiting to be assigned to the committee.
The likelihood that a tax hike will take effect anytime soon is slim. A two-thirds vote in both state chambers is required to bring a tax change to the governor’s desk. However, Governor Doug Ducey has stated that he is against a tax hike.
Indiana
An Indiana state legislature wants to freeze fuel tax rates.
A state law from 2017 increased the gas and diesel tariffs by one cent. The 11 cent surcharge tax on diesel also rose by 10 cents and was levied at the pump instead of being levied quarterly through tax returns. In addition, tax rates should be indexed annually through 2024.
As a result, gas and diesel tariffs are now set at 31 cents and 51 cents per gallon, respectively.
Rep. John Jacob, R-Indianapolis, has tabled a bill to remove the annual index factor for interest rates beginning July 1st.
In particular, HB1518 would reset gas and diesel taxes to the rates in effect on June 30, 2020. As a result, the gas tax would be set at 30 cents per gallon and diesel at 49 cents.
A tax impact statement attached to the bill shows the estimated loss of revenue for the State Highway Fund and Motor Carrier Fund, which would amount to between $ 131 million and $ 159 million annually through fiscal 2025.
The bill is on the House Roads and Transportation Committee.
Mississippi
Two bills in the Mississippi house would add revenue from increases in the fuel tax rate.
The state’s current fuel consumption tax is 18 cents. It’s been unchanged since 1987.
The first bill would raise the gas tax rate by 8 cents to 26 cents. The increases would be made in 2-cent increments over a four-year period.
At the same time, the diesel tariff would be increased by 12 cents to 30 cents. The increases would be made in increments of 3 cents.
HB574 is sponsored by Rep. Charles Busby, R-Pascagoula, and is awaiting review on the House Ways and Means Committee.
The second bill would apply to Marion County only.
HB947 would allow voters in the locale west of Hattiesburg along the Louisiana line to choose whether to impose a local tax on gas and diesel sales of up to 5 cents per gallon.
The proceeds would be used for local roads, paths and bridges.
Missouri
Efforts at the Missouri Statehouse are touted as helping to provide long-term funding for road and bridge works to be completed. The state’s fuel tax rate of 17 cents has remained unchanged since the mid-1990s.
The Missouri Department of Transportation has stated that annual road and bridge funding has a $ 825 million gap. Traffic officials say a dire situation in funding road and bridge works will only get worse until lawmakers reach an agreement.
Senate President Dave Schatz, R-Sullivan, is behind legislation to raise gas and diesel tariffs by 10 cents to 27 cents a gallon.
The increase would be gradual over five years. From January 1, 2022, the tax would be increased by 2 cents annually until January 1, 2026.
Voters would make the final decision in a nationwide referendum.
The invoice does not contain an indexing component – SB262.
Two house bills, HB114 and HB694, call for the same rate increases.
A proposed amendment to the state constitution was also introduced by Schatz. The passage of SJR21 would officially put the tax issue on ballot papers across the state.
All measures still have to be assigned to the committee.
North Dakota
A bill in the North Dakota House would raise the state’s fuel tax rate to increase transportation funding.
The state now collects 23 cents per gallon on diesel and gas sold.
HB1464, sponsored by Rep. Vicky Steiner, R-Dickinson, would increase the excise tax by 4 cents over two years to a total of 27 cents per gallon. The rate increases would take place on July 1, 2021 and 2022.
The bill is on the House Finance and Taxation Committee.
Washington
The Washington House Democrats were the first caucus in the state for the 2021 legislative year to propose a transportation package.
The majority party in the chamber has announced plans to raise the state fuel tax rate from 49.4 cents.
The 16-year financing package of $ 26 billion includes an 18 cents increase in the gas tax rate. The tax would be increased by 10 cents this year and another 8 cents in 2022.
The diesel tariff would be increased by the same amount with an additional increase of 3 cents.
Tax rates would also be tied to inflation, which would allow for annual increases.
“Our proposal is much larger than any other in state history because the needs and challenges are so much greater,” said Jake Fey, chairman of House Transportation, D-Tacoma, during a press conference detailing the plan .
A gas rate of 67.4 cents and a diesel rate of 70.4 cents are expected to bring in about $ 1 billion annually.
If approved, the state’s gas tax rate would surpass Pennsylvania’s 57.6 cent rate as the highest in the nation. The diesel tax would be number two nationwide after Keystone State’s 74.1-cent rate.
In addition, the house democracy package would include a new carbon fee.
The fee has been described as an aggressive climate change policy, which bills polluters with the right to emit carbon dioxide and other greenhouse gases.
The carbon fee would start at $ 15 per tonne of carbon. It’s estimated the levy would add about 14 cents per gallon of fuel. The fee would increase by $ 5 per tonne of carbon emissions in 2023 and again to $ 25 per tonne in 2025.
Also includes a $ 10 increase in truck license fees by weight and a $ 25 increase in IFTA decal fees.
About two thirds of all income would be used for work related to highways. Most of the balance would be used for initiatives to reduce CO2 emissions.
The other assemblies of the legislature are expected to introduce their own plans.
Wyoming
The state’s current tax rate of 24 cents per gallon has been unchanged since 2013. At this point the tax rate was increased by 10 cents.
The Joint Revenue Interim Committee has tabled a bill to leverage the existing source of funding and improve support for state and local road projects. In particular, the legislation would increase taxes on gas and diesel by 9 cents to 33 cents per gallon. The tax on alternative fuels would be increased by the same amount.
It is estimated that each penny increase brings in $ 6.7 million annually.
The Wyoming Department of Transportation reports unfinanced operating expenses of $ 135.6 million. The amount includes $ 72.3 million for construction and maintenance.
Bill HB26 would raise an estimated $ 60.3 million annually for state and local roads, according to the agency.
A tax bill attached to the bill shows that the state’s highway fund would raise approximately $ 40.2 million. Another $ 14.1 million would be allocated to county roads, while cities and towns would receive $ 5.9 million. The remaining $ 1.2 million would go to state parks. LL
Other government trends
Keith Goble, state editor for Land Line Media, follows many trends in state houses in the United States. Here are some recent articles from him.