Fuel Taxes

Alison Premo Black, Ph.D., is senior vice president for policy and chief economist at the American Road and Transportation Builders Association (ARTBA) in Washington, D.C. In addition, she serves as deputy managing director of the Contractors Division and manages the Transportation Investment Advocacy Center. She was among the presenters at a policy roundtable CSG hosted on May 19 as part of the 6th Annual CSG Transportation Leaders Policy Academy in Washington. She spoke about the resources ARTBA offers to transportation advocates, the level of state transportation funding activity in recent years, the gas tax as a revenue source and Congress’ continuing quest for a long-term solution to maintain the federal Highway Trust  Fund.

Ten state legislators from around the country, chosen in consultation with the CSG regions, attended the 6th Annual CSG Transportation Leaders Policy Academy May 18-20, 2016 in Washington, D.C. The academy took place against the backdrop of Infrastructure Week, a week of infrastructure-themed events in the National’s Capital and elsewhere. Attendees had the opportunity to participate in Infrastructure Advocacy Day on Capitol Hill and to meet with officials at the U.S. Department of Transportation. They took part in a policy roundtable with stakeholders and experts from such organizations as the American Society of Civil Engineers, the American Road and Transportation Builders Association, the American Association of State Highway and Transportation Officials, the U.S. Chamber of Commerce, Transportation for America, the Eno Center for Transportation and the Alliance for Innovation and Infrastructure. In addition, they attended briefings on state regulation of rideshare companies, autonomous and connected vehicle technologies and transit-oriented development. The group also toured the area around Navy Yard, a rapidly developing, transit-centric D.C. neighborhood that is home to Nationals Baseball Park and the U.S. DOT headquarters. And they heard remarks from Virginia Secretary of Transportation Aubrey Layne about the commonwealth’s efforts to reform its processes for transportation project selection and public-private partnership deployment. This page includes photos from the three-day academy, the complete agenda for the event and links to web pages where you can read extended excerpts of remarks from many of the speakers, view their PowerPoint presentations and find additional materials.

Next week (May 18-20), The Council of State Governments will host a group of 10 state legislators from around the country at the 6th Annual CSG Transportation Leaders Policy Academy in Washington, D.C. As part of the academy, attendees will take part in activities around Infrastructure Week, a national week of events, media coverage, and education and advocacy efforts to elevate infrastructure as a critical issue. I have more about the academy and Infrastructure Week below as well as details about another key event CSG is involved with happening next month.

During a recent CSG eCademy webcast, “States to Watch in 2016: Transportation Funding,” transportation policy experts made some predictions about upcoming transportation funding issues, and possible solutions, in the states. Joe McAndrew, policy director at Transportation for America, said 23 states have approved plans to raise transportation revenue since 2012. In 2015, eight states passed gas tax increases while other states considered tolling changes and other revenue options. But, according to McAndrew and other presenters, 2016 could be a slow year for major transportation funding initiatives.

Rhode Island Gov. Gina Raimondo last week signed legislation to fund a multi-year bridge repair program with a new toll on large commercial trucks and a combination of borrowing and refinancing. Rhode Island, which ranks 50th out of 50 states in overall bridge conditions, has been one of the only northeast states that does not charge  commercial trucks a user fee. There is also a variety of other tolling-related news from around the country as well as updates on the states to watch on transportation funding this year. Plus details on how you can join us for next week’s CSG eCademy webinar on the subject.

The New York Times says that the oil industry is in its “deepest downturn since the 1990s, if not earlier”. The price of a barrel of oil has plummeted, falling more 70 percent since mid-2014, and gas prices at the pump have followed – falling from $2.21 one year ago to $1.70 today (AAA). Unfortunately, a drop in energy prices means a headache for several states that rely heavily on severance taxes for revenue.

A majority of states (35) impose at least one form of severance tax, which is a tax on natural resource extraction. While overall severance taxes don’t make up a large percentage of total state taxes collected – 2.1 percent in 2014 – they have very different impacts across the states. For example, in 2014 severance taxes collected ranged from 72 percent of total tax revenue in Alaska and 54 percent of revenue in North Dakota to less than 1 percent in 18 states. In seven states, severance taxes make up 10 percent or more of total tax collections. 

CSG Director of Transportation and Infrastructure Policy Sean Slone outlines the top five issues in transportation policy for 2016, including federal funding uncertainty and underinvestment in infrastructure, transportation revenue options, tolling and public-private partnerships, and public transit challenges.  

With the passage of the FAST Act by Congress in late 2015, states have some of the long-term certainty they have long sought in the federal transportation program. But can a mostly status quo, five-year transportation bill help states make up for years of inadequate investment in the nation's infrastructure. More than likely, more than a few will still feel compelled to follow in the footsteps of eight states that raised gas taxes in 2015. Some may also turn to tolling and public-private partnerships to help fund projects, although those tools in the toolbox have seen increasing scrutiny and criticism in some parts of the country. State officials face a variety of other challenges as well including how to plan for the technological and demographic changes that could radically alter the transportation landscape in the years ahead and how to deploy and enhance the kinds of transportation options that will make communities into livable, sustainable, economically vital places. Here are my top five transportation issues for 2016 along with more than 500 links to resources from CSG and a variety of other sources where you can read more.

Facing continuing uncertainty with regards to federal funding, Tennessee and other states have postponed millions of dollars in transportation projects. But even as a gas tax increase has become a political third rail in Washington, many states have turned to the venerable transportation revenue mechanism this year to advance their transportation programs. This session highlighted both the impact of federal uncertainty and the successes of those states that passed gas tax increases in 2015.

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