States Eye the Fall and 2016 for Transportation Revenue Measures

With August drawing to a close, it’s time to check in once again on what states are up to on the transportation funding front. The number of states to increase their gas taxes this year now stands at seven with the addition of Washington State last month. Other states could be poised to join their ranks in the months ahead. Here’s a roundup of some of the latest developments and links where you can read more.

State Transportation Funding Updates

  • California: A Senate committee on a party-line vote has approved legislation to increase the state’s 42 cents-per-gallon gas tax by 12 cents, The San Jose Mercury News reported August 20. But the vote is seen as just the “opening salvo” in a battle between Democrats and Republicans likely extend into the fall. If the legislation receives final approval, it’s expected to generate $4 billion annually to help the state tackle a backlog of road maintenance. Annual vehicle registration fees for most cars would increase $35 and fees for electric vehicles would go up $100 under the plan.
  • Colorado: The Denver Post reported August 21 that conservatives in the state are getting behind the possibility of a gas tax increase, which would be the first in more than 20 years. Gov. John Hickenlooper remains noncommittal about the possibility, the newspaper reported. 
  • Connecticut: A transportation finance panel appointed by Gov. Dannel Malloy has been hard at work this summer studying how to fund a 30-year transportation improvement program. The Connecticut Mirror reported this month that some of the ideas being discussed by the panel—including a mileage fee like the one being implemented in Oregon—have already ignited something of a political firestorm among some state legislators. And the panel’s final report isn’t event due to the Governor until October.
  • Michigan: Lawmakers have adjourned until after Labor Day after failing to reach agreement on a plan to increase funding for Michigan roads, The Detroit Free Press reported. At issue is a compromise between the House and Senate that involves $600 million being raised from increased fuel taxes and registration fees and another $600 million from shifting general funds, which would require cuts to other programs. The ratio of new revenue to existing revenue has been a major sticking point.
  • Missouri: Due to a bleak funding outlook, the Missouri Department of Transportation has no transportation expansion projects planned for the next five years, a first in the department’s history. Voters rejected a sales tax increase last year to fund transportation and lawmakers could not reach agreement on a gas tax increase this year. Now some are touting an increase to Missouri’s lowest-in-the-nation tobacco tax as a possible source to fund transportation projects, The St. Louis Post-Dispatch reported August 18.
  • New Jersey: A gas tax increase is expected to gain momentum this fall when the New Jersey Assembly returns from its summer break, WKXW reported. Assemblyman John Wisniewski, who chairs the Transportation Committee, has proposed legislation that would increase the tax on petroleum products gross receipts from 4 cents per gallon to 9 percent of the average retail price of unleaded regular gasoline and another bill that would constitutionally dedicate the new revenue to the state’s transportation trust fund. The gas tax increase would be about 25 cents a gallon. But Wisniewski said that translates to only about 50 cents a day for the average New Jersey driver or $180 a year and those numbers compare favorably to the $600 to $1,200 a year people spend to maintain and repair vehicles after traveling on the state’s deteriorated roads. Wisniewski, who also chairs the CSG Eastern Regional Conference Transportation Committee, told attendees at the ERC meeting in Wilmington, Delaware earlier this month that he expects convincing the public that state government will spend their money well will be the hardest part of making the case for transportation funding because past history has eroded public trust. “The real issue for us … is how do we convey to our constituents that this time you can take it to the bank,” he said. But Gov. Chris Christie might also have something to say about whether a gas tax increase happens in New Jersey. The presidential candidate recently signed an anti-tax increase pledge with Grover Norquist’s Americans for Tax Reform.
  • Rhode Island: Lawmakers may meet in special session this fall to consider Gov. Gina Raimondo’s truck toll plan for financing bridge repairs. An economic analysis of the plan and other possible revenue-raising options has been underway this summer. Gas taxes, new user fees and the tolling of all vehicles (not just heavy trucks) are also being studied as options, The Providence Journal reported August 20.
  • Tennessee:  Gov. Bill Haslam has been on a tour of the state this summer talking about how inadequate transportation revenues are making it difficult to maintain Tennessee’s current transportation or improve the system to accommodate expected future growth. Haslam hasn’t said what he’ll recommend that legislators do when they return in January but some lawmakers are already expressing a lack of support for a potential gas tax increase, The Knoxville News Sentinel reported.
  • Utah: Transportation for America recently looked at Utah’s efforts this year to increase state and local transportation funding to meet the demands of a rapidly growing population. T4America’s Michael Russell writes that: “In a conservative state like Utah, supporters found that economic arguments worked best for convincing legislators and the public that transportation is a worthwhile investment. Their argument was two-pronged: first, a state with a good transportation network can more easily attract businesses, which need solid transportation infrastructure to attract talent, get their employees to work, and ship their goods, and, second, that waiting to repair critical transportation infrastructure will make maintenance cost more in the long run.”
  • Washington: Gov. Jay Inslee signed legislation on July 15 to approve an 11.9 cent gas tax increase and $16 billion in transportation projects around the state. The first 7 cents of the increase took effect August 1. As The Spokesman Review noted, the package of transportation bills took “nearly three years of negotiations, compromises, false starts and debates in the legislature.”    

Further Reading

  • The Associated Press reported August 17 on how state and local governments are taking action on transportation funding this year even as a long-term plan for funding highways at the federal level remains elusive.
  • The New York Times editorial board weighed in August 22 on state transportation funding efforts: “States still need the federal funds that they rely on for about half their capital expenditures related to transportation. But governors and legislatures, fed up with delay, have been approving higher fuel taxes, vehicle fees and construction bonds with little hesitation, while the Republican Congress remains stuck on its no-new-taxes campaign mantra.” The opinion piece quotes Iowa transportation director Paul Trombino, who is serving as vice president of the American Association of State Highway and Transportation Officials this year. “I don’t know of a state that’s not having the conversation,” Trombino said.
  • Stateline reported in July on why so many states decided they couldn’t wait any longer and that 2015 would be the year to raise new transportation revenues. The article notes that “in several states, pointing out that the gas tax hadn’t been raised in many years proved to be a powerful argument.”