States Losing $10 Billion in Gas Taxes Every Year; Solutions Available for Courageous Lawmakers


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Our roads, bridges, and transit systems are in decline, and unless lawmakers are cured of their anti-tax phobia, the “fix” could come from education cuts in some states and even more deficit spending at the federal level.

It’s against this backdrop that our friends at ITEP released a first of its kind report on gas taxes last week, titled "Building a Better Gas Tax."  In the report, ITEP shows that state governments are losing $10 billion every year because of their failure to plan for predictable increases in transportation construction costs. Meantime, much of the federal government’s contribution to states’ transport budgets is being paid for with borrowed money because our national gas tax is also stagnant, costing us $23 billion annually. 

Fortunately, there are glimmers of hope that this problem might be addressed responsibly, at least in some states.  Most notable are Maryland, Michigan, and Pennsylvania, where influential lawmakers are planning to push for long overdue gas tax increases when legislative sessions start next month.

By contrast, Oklahoma and Virginia are each led by governors who have announced their intention to cut education funding in order to pay for road and bridge repairs.

ITEP’s report recommends that lawmakers follow the path being considered in Maryland and other states: an immediate gas tax increase, coupled with reform to ensure that the tax can hold up over time alongside rising asphalt and construction costs.  ITEP’s report also urges that states enact low-income relief to offset gas tax payments made by those least able to afford the tax.

The report has already been greeted warmly by the transportation policy community, and has received significant press coverage (and praise from editorial boards) in a number of states where gas taxes are sure to be most relevant in the months ahead, including Maryland, Michigan, and Virginia.

We'll keep you updated on all of these debates as they develop, but in the meantime we encourage you to check out the report at www.itepnet.org/bettergastax and see how your state compares.

Photo of Gas Station via Future Atlas Creative Commons Attribution License 2.0

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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