Looking Back at Four Years of Gas Tax Reforms


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While New Jersey is getting plenty of attention this week for increasing its gas tax for the first time in decades, it’s worth remembering that the Garden State is not alone in boosting its gas tax to fund infrastructure improvements. Lawmakers in nineteen states and the District of Columbia have enacted gas tax increases or reforms since 2013 and more states will very likely follow suit next year. Here’s a quick rundown of where state gas taxes have been increased or reformed since 2013:

2016 Enacted Legislation

1. New Jersey: A 23 cent per gallon increase in the gasoline tax took effect on November 1, 2016. The diesel tax will rise by a similar amount next year in two stages (on January 1 and July 1).

 

2015 Enacted Legislation

2. Georgia: A 6.7 cent increase took effect July 1, 2015. A new formula for calculating the state’s tax rate will allow for future rate increases alongside inflation and vehicle fuel-efficiency improvements. This will allow the tax to retain its purchasing power in the years ahead.

3. Idaho: A 7 cent increase took effect July 1, 2015.

4. Iowa: A 10 cent increase took effect March 1, 2015.

5. Kentucky: Falling gas prices nearly resulted in a 5.1 cent gas tax cut in 2015, but lawmakers scaled that cut back to just 1.6 cents by setting a minimum “floor” on the state’s gas tax rate. The net result was a 3.5 cent per gallon increase relative to previous law.

6. Michigan: The state’s gasoline and diesel taxes will rise by 7.3 cents and 11.3 cents, respectively,on January 1, 2017. Beginning in 2022, the state’s gas tax will begin rising annually to keep pace with inflation.

7. Nebraska: A 6 cent increase was enacted over Gov. Pete Ricketts’ veto. The gas tax rate will rise in 1.5 cent increments over four years. The first of those increases took effect on January 1, 2016.

8. North Carolina: Falling gas prices were expected to trigger a gas tax cut of 7.9 cents per gallon, but lawmakers scaled that cut down to just 3.5 cents—resulting in a 4.4 cent increase relative to previous law. Additionally, a reformed gas tax formula that takes population and energy prices into account will bring further gas tax increases in the years ahead.

9. South Dakota: A 6 cent increase took effect April 1, 2015.

10. Utah: A 4.9 cent increase took effect on January 1, 2016. Future increases will occur under a new formula that considers both fuel prices and inflation. This reform made Utah the nineteenth state to adopt a variable-rate gas tax.

11. Washington State: An 11.9 cent increase was implemented in two stages: 7 cents on August 1, 2015 and a further 4.9 cents on July 1, 2016.

 

2014 Enacted Legislation

12. New Hampshire: A 4.2 cent increase took effect July 1, 2014.

13. Rhode Island: The gas tax rate was indexed to inflation. This resulted in a 1 cent increase on July 1, 2015 and will lead to further increases in most odd-numbered years thereafter (2017, 2019, etc).

 

2013 Enacted Legislation

14. Maryland: The first stage of a significant gas tax reform, which tied the tax rate to inflation and fuel prices, took effect on July 1, 2013. Since then, the rate has increased by a total of 10 cents above its early-2013 level.

15. Massachusetts: A 3 cent increase took effect July 31, 2013.

16. Pennsylvania: The first stage of a significant gas tax reform, tying the rate to fuel prices, took effect on January 1, 2014. So far the rate has increased by 19.1 cents per gallon.

17. Vermont: A 5.9 cent increase and modest gas tax restructuring took effect May 1, 2013. Since Vermont’s gas tax rate is linked to gas prices, however, the actual rate has varied since then.

18. Virginia: As part of a larger transportation funding package, lawmakers raised statewide diesel taxes effective July 1, 2013, as well as gasoline taxes in the populous Hampton Roads region. Outside of Hampton Roads, gasoline taxes are 1.3 cents lower than they were before the reform, but a new formula included in the law will cause the tax rate to rise alongside gas prices in the years ahead.

19. Wyoming: A 10 cent increase took effect July 1, 2013. Gov. Matt Mead’s signature on this increase made Wyoming the first state to approve a gas tax increase in over three and a half years.

20. District of Columbia: Legislation approved in 2013 has yet to impact DC’s gas tax rate in practice, though by tying its tax rate to fuel prices the District opened the door to potential gas tax rate increases in the future.

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