The lack of adequate funding for roads, bridges, and transit has been a major topic of debate in the United States for years. Anti-tax groups often claim that the problem could be fixed by redirecting education funds toward roads, or by simply cutting “waste” in the transportation budget. But those arguments just got a lot harder to make in ten states, where our partners at the Institute on Taxation and Economic Policy (ITEP) have discovered that the gas tax has reached its lowest level ever, after adjusting for inflation.
The ten states where the gas tax rate is at an all-time low are Alabama, Alaska, Delaware, Idaho, Iowa, Nebraska, New Jersey, South Carolina, Utah, and Virginia. As the report explains, it should come as little surprise that many of these states have debated gas tax increases or reforms in recent months, given just how difficult it is to balance a transportation budget with a gas tax that has “hit rock bottom.”
Having a safe and efficient transportation network costs money. Given this fact, levying a gas tax rate that’s so low as to be historically unprecedented is doing more harm than good.