More than half of all U.S. states have raised fuel taxes for highway funding

Updated Aug 15, 2017

Gas TaxWith transportation revenue lagging, 26 states and the District of Columbia have enacted legislation to raise the gas tax in the past four years, according to a report by the National Conference of State Legislatures (NCSL).

The most recent additions in 2017 include California, Indiana, Montana, South Carolina, Oregon, Tennessee, and West Virginia. In addition, Utah enacted measures to speed up the gas tax indexing provisions in the its fuel tax legislation, which will likely lead to a gas tax increase.

These states join New Jersey, Georgia, Idaho, Iowa, Michigan, Nebraska, South Dakota, Washington, Kentucky, North Carolina, New Hampshire, Rhode Island, Maryland, Massachusetts, Pennsylvania, Vermont, Virginia, and Wyoming.

“We’ve seen more bipartisan agreement on raising gas taxes than almost any other tax out there,” said Jared Walczak, senior policy analyst at the Tax Foundation, a right-leaning think tank in Washington, D.C., according to The Pew Charitable Trust.

Lawmakers say they were forced to act because of the poor condition of their state’s roads and bridges. “The deterioration of the infrastructure, particularly the highways, in South Carolina was the impetus,” House Majority Leader Gary Simrill (Rep.) said, according to the agency, regarding the law he pushed through after the South Carolina Department of Transportation reported that half the roads in South Carolina are in poor condition.

The typical gas tax increase is a few more cents a gallon spread over several years, which is enough to provide the funding needed to help tackle the backlog of maintenance and expansion projects in each state, but doesn’t eliminate them. South Carolina’s increase, as an example, is projected to raise approximately $180 million in its first year, with annual increases to over $700 million by 2024, but SCDOT says it needs $11 billion to repair every substandard road in the state.

States are also dealing with the fact that new cars and trucks use less fuel, and some don’t use gasoline at all. Six of the eight states that raised the gas tax in 2017 also raised some other vehicle fees and imposed others, including a new registration fee of $100-$150 for electric vehicles.