8 states where the gas tax just went up

From Connecticut to Wyoming, lawmakers are turning to these hikes to fund long overdue road and infrastructure projects.

By Bruce Kennedy Jul 3, 2013 7:11AM

Filling up gas tank (copyright Corbis)It's the summer driving season, and while gas prices traditionally rise this time of year, they've been falling of late. But July 1 was the start of a new fiscal year for many states, and on Monday eight states increased their gasoline tax rates.


According to new analysis from the Institute on Taxation and Economic Policy (ITEP), a total of 10 states will be raising either gas or diesel taxes in the next two weeks.


ITEP says 16 states now have gas taxes that are "designed to rise alongside either increases in the price of gas or the general inflation rate." Massachusetts, Pennsylvania and the District of Columbia are also considering similar legislation aimed at raising revenue for infrastructure and transportation issues.


"The bottom line is, these increases are really just long overdue," Carl Davis, ITEP senior analyst and the study's author tells MSN moneyNOW. "We're coming up on the 20-year anniversary of the last time the federal gas tax went up."


"And some people might say, great, we don't need to raise taxes," he continued. "But the way the gas tax is designed, it's designed in a way that it has to be raised from time to time. Just imagine if we still had the 1 and 2-cent gas taxes that the state and federal governments had back in the 1930s. We wouldn't be able to pay for anything close to the infrastructure we have today."


Wyoming residents will notice the biggest increase at the pump, at 10 cents a gallon, while fuel taxes also crept up in Connecticut (3.84 cents), California (3.5 cents), Maryland (3.5 cents), Kentucky (2.4 cents), Nebraska (1.7 cents), Georgia (0.6 cent) and North Carolina (0.1 cent).


Davis noted that current gas taxes are paying only about one-third of the funds needed for roads and other transportation projects. And according to an ITEP analysis done in late 2011, which looked at state gas taxes relative to construction costs and the rate of inflation, gas taxes in almost 20 states were actually down 40% or more from their last round of increases.


"There are definitely states that have decided to pay for roads and bridges by taking money away from education, and taking money away from other public services," he said. 


"We've seen that happen this year, we've seen it happen in years past, but you can only do that for so long," he added. "And eventually you need to address the root problem -- which is that the revenue sources states are trying to use to pay for roads are badly designed and not keeping pace. And that's why we're finally seeing some of these taxes raised."


More on moneyNOW

132Comments
Jul 3, 2013 9:13AM
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"Davis noted that current gas taxes are paying only about one-third of the funds needed for roads and other transportation projects."

 

Only because the states have been using the gas taxes for other than road work, and now the roads are in such bad condition will cost a fortune to repair.  Same thing will happen again.  Some road work for a short time, then use the money for other things, then roads will get worse again.

Jul 3, 2013 9:27AM
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why not make a law that all tax $ on gas is used for roads ??? Hold the state accountable for the $
Jul 3, 2013 9:00AM
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State and local taxes are hurting me far more than Federal taxes.
Jul 3, 2013 9:09AM
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Welcome to Maryland where if you have a dollar ...they wil take it and tax till you have a dime!!!!
Jul 3, 2013 9:27AM
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Can we stop all the talk about the "greedy oil companies"? The Government is the biggest profiteer on gasoline.
Jul 3, 2013 9:09AM
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Of course we wouldn't want the extra money in our pockets to buy more tangible things, maybe splurge on a dinner, go to a movie, travel a little bit more.  So raise the gas prices ten cents and for my 15 gallon tank you get 1.50.  Believe it or not I feel the effects and might not take my family to dinner every week.  Dinner for 4 at a half decent restaurant is about 50$ minimum, state sales tax in my state is 6% so that would be 3$ in tax.  So if they take the 1.50 from me at the pump they more than likely will lose the 3$ from my family dinner.  Let's add it up shall we,  Dinner 4 times a week dropped down to maybe 2 has a tax implication of 12$ down to 6$.  Filling my tank 4 times a week and adding the 10 cents gets the state and extra 6$ so they can make up for the lost revenue of my dinners but the true problem is the fact that I have now taken my hard earned money out of my local economy and given it directly to the state and the oil companies instead of my local establishments.  Maybe 5 to 10% of 100$ at the pump might stay in my local economy where as 100$ at a local restaurant might keep 50 to 100% of my money in my local economy.  See where I am going with this folks?  Our government has it all backwards. 
Jul 3, 2013 9:40AM
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if the states didn't hand out $100,000.00 pensions to their state workers, they wouldn't be on the edge of bancruptcy now.
Jul 3, 2013 9:37AM
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Has anyone the past 5 years ever driven by a street or highway project being done by city or county or  state employees where you have seen more than 1 out of 6 "workers" actually working?
Jul 3, 2013 9:13AM
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3.60 here in Connecticut, land of tax on everything.
Jul 3, 2013 8:47AM
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If they do not get the funding from the federal government they will raise taxes. Pay me now or pay me later. The same across the board. Lower taxes is a myth
Jul 3, 2013 9:38AM
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The Government will do anything they can get away with to fund their pork barrel spending, Graft and corruption that they feed on. We are just pawns in the big game
Jul 3, 2013 9:09AM
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here in California...$4.13 for a gallon...we are getting it the worst!
Jul 3, 2013 9:43AM
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Folks, Have you noticed that even when they do not raise taxes the Govt. just turns around and charges a fee instead?   Look at any document you have to pay and make note of the fees charged!  Just another name for taxes!
Jul 3, 2013 9:36AM
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What do you expect? I live in Maryland where greed is now the State motto.

VA has lowered gas taxes but raised the sales tax. for VA residents.

Jul 3, 2013 9:39AM
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How about the politicians take some money from their overblown salary's and from that retirement package they gave themselves and put it in the general fund.  Maybe if their retirement was based on Social Security like the rest of us they would fix that.  What am I saying????  If their retirement was social security like us we would all be rich when we retire!
Jul 3, 2013 9:14AM
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the real problem is the road construction union with prevailing wage is driving up the cost of roads.  $35 dollars for the lowest paid worker, and no one can join their union.  there are lots of truck drivers, bulldozer operators, and backhoe operators that would love the $150 and hour rate
Jul 3, 2013 9:20AM
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Increasing the gas tax is a major slap in the face from this administration. Instead, how bout taxing the oil companies out the yin yang and give us some relief. I'm sure it would be passed on to us anyway, but this is just so ridiculous. "We The People," should hire an outside accounting firm to audit every state and the Federal Goverment to boot. Democrat...Republican....they are the same animal. No representatives have our best interests at heart anymore. Are we still the best country...yes...for now, but I'm not so sure in another 10 years. China sees the writing on the wall, yet our politicians and big companies can't see past their own wallets. This is the New World America. Congrats to Obama for forcing his socialist agenda down our collective throats. You got what you wanted. Disgusting! Disgusted! Texas is the only state in the right frame of mind these days. All 49 remaining states should jump on board, but it will never happen in this bi-partisan world we live in. Divided we've fallen...Can we get up?
Jul 3, 2013 8:58AM
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Paid $3.21 for unleaded yesterday here in Houston..
Jul 3, 2013 9:03AM
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$3.16 for BP and Shell regular here in central Virginia
Jul 3, 2013 9:15AM
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$3.09/gallon regular unleaded in Indianapolis yesterday
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