Gasoline taxes are quietly getting higher

Under pressure to repair their dilapidated roads, at least 17 states have enacted or are considering raising their per-gallon levy.

By Jonathan Berr Apr 8, 2013 6:54AM
 Filling fuel tank (Corbis)It may be hard to imagine that in this age of anti-tax fervor in the U.S. that at least 17 states have either raised or are considering an increase in their gas taxes. The reason for hiking this hard-to-avoid levy is simple: States need the money to fund repairs of dilapidated roadways and bridges, according to The Wall Street Journal.

Even so, their efforts are insufficient. In its latest report card, The American Society of Civil Engineers estimates that the U.S. will need to spend $3.6 trillion to repair its public infrastructure by 2020 -- and as The Journal notes, the U.S. may raise only half of that amount.

Business groups, including the U.S. Chamber of Commerce, have pushed for higher gasoline taxes to ensure that transportation projects are adequately funded, as have similar organizations on the state level. According to the Tax Foundation, gas tax and toll revenues pay for only about a third of state and local spending on roads. The remainder comes from the general fund, which includes aid from the federal government.

"There is a big disconnect between what states are spending and what they are collecting for transportation," said Tax Foundation economist Joseph Henchman in an interview.

In 2010, state and local governments spent $155 billion on highways but took in just $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, according to the Tax Foundation.

Since most gas taxes aren't tied to inflation, their real value falls over time, and many states have put off raising them.

New Jersey, the state with the highest population density, hasn't changed its gasoline tax since 1988. Chris Christie, the state's Republican governor who is up for reelection, has refused to raise the levy despite being urged to do so by transportation advocates. 

The Garden State isn't alone in dragging its heels. Virginia and Maryland waited more than two decades before raising their rates, and the federal gas tax was last raised in 1993.

The U.S. Energy Information Administration is forecasting that the average retail price for unleaded regular-grade gasoline for the rest of the year will run about $3.56 per gallon. Next year, it predicts a drop to $3.38. That would seem to leave a reasonable opening for states to raise their gasoline taxes.

Follow Jonathan Berr on Twitter at @jdberr.

More on moneyNOW

Apr 8, 2013 8:51AM

What happened to the $787 BILLION dollars from the 2009 Stimulus plan that obama said would go towards fixing the infrastructure of the USA?

Apr 8, 2013 9:44AM

Our politicians mishandle our tax money and then turn around and tax us for more.

Apr 8, 2013 8:37AM
All taxes are quietly getting higher, but we haven't seen anything yet. Wait until Obamacare takes full effect in October 2013, the effects of an eroded dollar with real inflation cannot be disguised any longer by doctored-up CPI data and other 'new' taxes like the carbon tax will be a reality in the near future. Keeping sleeping and supporting the same status quo folks, you're doing a fantastic job on helping the dismantle of America.
Apr 8, 2013 9:49AM
Again, it's not a tax problem it's a spending problem.  It's not the taxpayers' fault that the incompetence of government can't figure out how to balance a checkbook.  We as citizens due it every day.  Don't punish me as a citizen for your spending problem.  As another post said "you're doing a fantastic job on helping the dismantle of America."  

If we stuck to the sole purpose of government and nothing more then there wouldn't be a problem.  Protect the citizens of this country through law enforcement and the military.  Tax me to pay for infrastructure.  Any other program beyond these 2 things is in serious violation of our freedom.  
Apr 8, 2013 9:31AM

Higher gas taxes just so we can wipe out more existing lanes just for stupid bike paths.


How about a bicycle tax!!!!!!!!!!!!!!

Apr 8, 2013 9:17AM
How can this be, NBC said just yesterday the price of gasoline was going down? I don't think they read their own bs, much less look for the truth.
Apr 8, 2013 10:03AM
Good luck with that one!  How about cutting the Government off completely eventually people have to say enough is enough these idiots have neglected their jobs now want me to pay for it how about go **** yourselves worthless pricks!
Apr 8, 2013 10:35AM

Less than $100 billion was actually spent on highway infrastructure.


Most of the money went to states to backstop their rising costs

for Fed mandated programs. The bill was the American Reinvestment

and Recovery Act. You can probably get the $$  from the FHWA web site.

Another SAD chapter in bait and switch, poor media coverage, etc.


By the way, more fuel efficient vehicles mean less tax $$ for states and the FHWA.

Apr 8, 2013 10:00AM
Cost of all products will continue to go up at alarming rates yet median wages continue to drop.  Great recovery.  Learn how we built the interstate system and without creating a deficit.   I think people are finally figuring out how much billions of dollars on spending really means, nor less trillions.  We do have a spending propblem.   Like all other tax issues, demand has remained constant or reduced.  Have to find more tax $ to feed the gov machine.
Apr 8, 2013 9:10AM

Other tax revenues are down.  For example, now that the government has successfully vilified smoking, tobacco tax revenues are practically non-existent... not because they aren't high enough (as a matter of fact tobacco is taxed at a higher rate than practically any other rate per user).  Good for health, bad for revenue... and don't think for a second this has relieved the cost burden on health care for one moment.  The arguments that we (the taxpayers through Medicare, Medicaid, etc.) don’t have to pay as much in healthcare for people because they don't get cancer or emphysema as often is FAR outweighed by the cost of paying other benefits (think Social Security) and other healthcare costs (doctor visits, medications, etc.) for the people now living much longer without these diseases... now they develop diseases in older age (diabetes, for example) that are also costly to medicate.  Name one older person (above 75) that you know who doesn’t have at least eight prescriptions they fill… and remember these people are now retired, so they aren't producing revenue in retirement thereby reducing the tax base to pay these very benefits.


All I'm saying is before you go blaming the government or calling them greedy for raising your gas tax, remember... the above is just one example (albeit a rather large one) of a tax base that was lost... and in the name of keeping the American people safe from themselves.  After all, legislatures we elected decided that if the people couldn't quit smoking on their own they'd raise taxes to the point to make it unaffordable... they couldn't argue the higher tax was to cover the expenses of smoker's healthcare because the tobacco settlement took care of that for the states and the tax rate on smokers is higher than anything else, including alcohol which causes just as many, if not more, health problems.  Nope, it was to make smoking as close to illegal as they could (and socially unacceptable) without making it illegal.  And people always knew smoking wasn’t healthy.  Cigarettes were called cancer sticks long before the Surgeon General published a report proving it.


So remember... the revenue really does have to come from somewhere.  The government is not getting any smaller (they now have their fingers in healthcare... which is extremely expensive to administrate) and tax revenues that this country used to rely on (tobacco taxes alone built roads, bridges, universities, and other critical infrastructure) are no longer available, and likely to never be available to the level they once were.  It really does make sense that the government will tax what the public is spending on, which right now is gasoline.


Just like dwindling tobacco tax revenue, if we get cars that are so fuel efficient or run on alternative energy source then you can be guaranteed the government will find another area to raise taxes...  It's inevitable.

Apr 8, 2013 10:38AM
If we had a president leading this country, we'd have enough jobs to eliminate these democrat hand out! The other is the Idiot-In-Cheif is only a prostitute for the Unions. This is why we don't have Job Growth! If the unions are not in control, there are no new jobs....Only union jobs! Unions need to go as they are nothing more that organized crime. I know some don't agree with this. Union used to be a good thing for the worker and the country. Today, they do absolutley nothing for the Good of the Country. That's a fact. They only benifit themselves and trash all else. Notice I said today! That's a fact. Prove me wrong! You can't!
Apr 8, 2013 9:47AM
Some states have their gas tax monies going into their general fund , never to be seen again . This surly doesn't help . Some states have toll roads , so those who use them should be paying for them , something that should also be done with airports and harbors .
Apr 8, 2013 9:51AM
While per gallon gas taxes have not increased in NJ as noted in the article, highway tolls on the Garden State and the NJ Turnpike have sky rocketed in recent years. Toss in the bridges and tunnels to NYC which have had over 50% increases.
Apr 8, 2013 10:57AM
Governments are getting completely out of control. That includes federal, state and local. The people need to start putting up the people's candidate and quit letting money and the media pick your candidates.
Apr 8, 2013 12:41PM

Let's see, California sells ONE BILLION (yes billion!) gallons of motor fuel EACH MONTH.


It is taxed at about 70 cents per gallon.  That equates to $700 million per month and $8.4 BILLION per year.  And that's not enough to maintain our roads?


The problem is not the amount of taxes levied on fuel, it's where that money goes, which in CA is the general fund and is used to pay for everything (and I'll leave it generalized) other that highway maintenance!



Apr 8, 2013 11:26AM
This is yet another way that the "leadership" of this country is going to ensure that the people (us common folks) will never see $2.00 per gallon gas ever again.....  Oil prices will fall, taxes will compensate for that reduction, and gas prices will remain static, but on the same hand, we aren't going to see tax increases.  Sure glad those of you that voted for the status quo believed in all of that FORWARD crap that was spewed.....  Nothing like a fed up America voting in the very same people that kept the same issues in place.  Next thing we will hear is that a budget is "right around the corner....."  Hahahahahaha!!!!!  Yeah, that'll happen.....
Apr 8, 2013 10:13AM
Is the GOV smart enough to figure out that if a consumption tax is on a product, consumption goes down?  Never ending % increase in taxes to just stay even with the past revenues.
Apr 8, 2013 11:13AM
Hire non union and labor costs will be cut in half
Apr 8, 2013 11:59AM

I live in Utah and theres NO gas tax increase here thank goodness. Then again Utah is a red state and we still seem to have good maintained roads :-) 

Apr 8, 2013 12:23PM
It's nothing to do with what you drive it's the thieves in Washington sticking American's up the **** with Gas, Illegals and Tax's.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?


[BRIEFING.COM] S&P futures vs fair value: +7.40. Nasdaq futures vs fair value: +14.50. U.S. equity futures trade modestly higher amid upbeat action overseas. The S&P 500 futures hover seven points above fair value after climbing to highs after the start of the European session. That is somewhat fitting considering Europe, and specifically Scotland, will be in focus this evening with the referendum on independence taking place at this time. Referendum results are not expected until ... More