TranspoAdvocate NewsState & Local Funding News
TIAC staff tracks the latest state and local transportation funding news and provides regular updates on TranspoAdvocates News. To contribute to these efforts, contact Carolyn Kramer.
- Wisconsin Assembly Republicans presented a plan on May 4 to create a 5 percent sales tax on the average wholesale price of gasoline, while decreasing the flat excise tax paid at the pump.
- South Carolina House lawmakers on May 3 voted 107-7 to reject the amendments made by the Senate on House Bill 3516. Both chambers appointed three members each for a conference committee to discuss a compromise.
- Colorado legislation to transfer 5 percent of state sales tax revenue annually to fund the state’s transportation infrastructure cleared the Senate Finance Committee 3-2 on May 2. The bill, which would generate $300 million annually, is projected to face strong opposition in the House.
- Oklahoma legislation that could increase the state gas tax by 6 cents-per-gallon cleared its first hurdle by receiving approval from the Joint Committee on Appropriations May 1.
- Senate amendments on another Oklahoma bill to create registration fees for electric and hybrid vehicles were rejected by the House on Mary 2. A conference committee was requested to discuss a compromise.
How states choose their method to tax motor fuel is one of the topics to be explored at the 4th Annual “National Workshop for State & Local Transportation Advocates” on July 12 in Washington, D.C.
Three transportation advocates will compare the way their state taxes motor fuel— a flat excise tax, a variable-rate tax that adjusts based on the average wholesale price of motor fuel, and a variable-rate tax that adjusts based on changes to both the Consumer Price Index and population growth. Speakers will share the strengths and challenges of the different taxes, and the outlook for that method going forward. Additionally, two advocates will discuss the different paths their states took to solve the same motor fuel tax dilemma.
- Juva Barber, executive director of Kentuckians for Better Transportation, will discuss the state’s variable-rate tax, a percentage on the average wholesale price of gasoline, and how the need to revise the formula arose in 2015 when gas prices fell.
- Burt Tasaico, state program analysis engineer for the North Carolina Department of Transportation. Tasaico will share how his state stabilized and modernized a 30 year old variable-rate formula to one that adjusts the state gas tax based on changes to the Consumer Price Index for Energy (making up 25 percent of the tax) and state population growth (making up 75 percent of the tax), the impact of that formula on the state transportation budget, and the outlook going forward.
- Idaho State Sen. Bert Brackett (R- District 23), will discuss 2015 legislation that included a flat excise tax increase. He will also discuss how the decision was made to continue the state’s fixed cent-per-gallon fuel tax structure and whether alternative fuel tax structures were debated. Additionally, Sen. Brackett will discuss Idaho’s 2017 transportation legislation seeking to continue to provide support for the state’s roads.
Other key sessions include:
- “Alternative Transportation Funding Options”
- “2016-2017 State Transportation Funding Roundtable”
- “2013 State Gas Tax Increases: Where are They Now?”
- “State Transportation Funding Champion Legislators”
- “State and Local Transportation Funding Trends”
- “Building America’s Economic Expressway Campaign”
- “Federal Transportation Funding Developments”
The Workshop, a signature program of the Transportation Investment Advocacy Center™ (TIAC), is being held in conjunction with ARTBA’s Public-Private Partnerships (P3) in Transportation Conference.
Signed into law
- Tennessee’s IMPROVE Act— legislation that increases the state gas tax and other transportation-related fees— was signed into law by Gov. Bill Haslam (R) on April 26. The bill is estimated to generate $350 million annually.
- Indiana’s House Bill 1002— a bill that will increase the state gas tax and additional transportation-related fees—was signed into law by Gov. Eric Holcomb (R) on April 27. The bill will generate an estimated $1.2 billion annually by 2024.
Approved by the legislature
- The Montana legislature approved a state motor fuel tax increase and implemented new electric vehicle registration fees on April 22. The bills are pending approval by Gov. Steve Bullock (D).
Progress being made
- The South Carolina Senate reached an agreement on April 27 on House Bill 3516 (approved by the House on March 1) with a veto-proof majority of 30-9 to approve the bill with amendments. The Senate’s version raises the gas tax increase to 12 cents-per-gallon (2 cents more than the House version) and includes state department of transportation reforms and several tax credits. It maintains several aspects of the House version, including new fees for electric and hybrid motor vehicles, indexing the gas tax to the Consumer Price Index, and increasing vehicle related fees and fines. The Senate version would generate an estimated $640 million annually after the tax breaks. The chamber vote came after lawmakers voted to sit down with Sen. Tom Davis (R-Beaufort), who indicated his intent to filibuster the legislation. The bill now goes back to the House for consideration of the changes.
- The Oklahoma Senate approved an amended bill on April 27 to create a new $100 electric vehicle registration fee and $30 hybrid vehicle registration fee. The bill goes back to the House, where the bill was initially approved on March 8.
- Colorado legislation to increase the state sales tax to fund needed transportation improvements failed in a committee vote on April 25. Lawmakers are now turning their attention to a bond proposal.
April 27: 4 More States Set to Increase Gas Taxes to Support New Transportation Investments; New Analysis Shows Little Political Fallout
91% of legislators who supported an increased gas tax were reelected during the next general election; 98 % of lawmakers won their 2016 primary race.
(WASHINGTON)—An examination of more than 2,500 state legislators from 16 states finds 91 percent of lawmakers who supported legislation to increase their state gas tax between 2013 and 2015 and ran for re-election won their seat during the next general election.
The analysis, from the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center (TIAC), comes as legislators in four states—Tennessee, Montana, California and Indiana—have voted this month to increase their state gas tax to support new transportation improvements. The respective governors of each state are expected to sign the measures. It brings to 21 the number of states that have increased fuels taxes since 2013.
For Republican state legislators who supported a gas tax increase, 95 percent were reelected, the same reelection rate as those officials who voted against the gas tax increase. Democrats who voted for a gas tax increase were reelected at 89 percent, compared to 86 percent who voted against the same legislation.
“The voters in these states understand that lawmakers are showing political will to increase resources for transportation investment. For the majority of these states, their gas tax had not been raised in over 15 years,” said ARTBA Chief Economist Dr. Alison Premo Black. “It is now up to Congress and the Trump administration to address the stability of the Highway Trust Fund, which provides revenue for over half of all state highway program capital outlays.”
More than 91 percent of legislators who sponsored bills to increase their state gas tax were also reelected.
Additional analysis of the 2016 primary elections in the eight states that passed a gas tax increase in 2015 found that 98 percent of the Republican and 98 percent of Democratic lawmakers who approved a gas tax increase and ran for their seat in a primary race moved on to the general election, compared to 97 percent of legislators who had voted “no” on the gas tax increase.
Read the full report.
The Tennessee legislature gave final approval on April 24 for the “Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy” (IMPROVE) Act, a bill that will:
- Gradually increase the state gas tax by 6 cents-per-gallon (beginning with a 4-cent increase on July 1 and a 1-cent increase every July 1 for the next two years) and the diesel tax by 10 cents-per-gallon;
- Create an annual $100 road user fee on electric vehicles and increase taxes on alternative fuel;
- Raise vehicle registration fees by $5 for Class A through Class H vehicles, by $10 for private and commercial motor vehicles operating for hire and who transport passengers, and by $20 for trucks and truck tractors;
- Permit municipalities to seek voter approval for a surcharge on their local privilege taxes to be dedicated to public transit projects.
All revenue, including an annual 2 percent diversion to the state’s General Fund, will be dedicated to transportation purposes.
In order to balance the increased transportation funding and offset the increase in user fees, the bill will reduce the state’s sales tax on groceries, decrease the franchise and excise tax paid by businesses, and phase out the Hall income tax. The tax cuts are estimated to total $300 million after full implementation.
The IMPROVE Act— also called the “2017 Tax Cut Act”— is expected to generate $350 million annually for transportation funding, with $245 million of the revenue allocated to the Tennessee Department of Transportation, $35 million to cities, and $70 million for counties.
The House voted 60-37 to advance the bill on April 19 after numerous hours of debate on proposed amendments, including proposals to eliminate the motor fuel tax increase, utilize revenue from the state’s budget surplus and reallocate a portion of the state sales tax for transportation purposes. The Senate picked up the bill later the same day and voted 25-6 to approve with bipartisan support, but added an amendment to increase property tax relief for disabled veterans and sent the legislation back to the House for final approval. On April 24 the House voted 67-21 to send the bill to the governor.
April 26 Update: Gov. Bill Haslam (R), a vocal advocate of the IMPROVE Act, signed the bill into law on April 26.
Tennessee is the fourth state to legislatively increase its gas tax in 2017, and the 21st state since 2013. Read ARTBA-TIAC’s case studies for details on previous state gas tax increases, and visit the ‘State Legislation’ page for information on what other states are doing in 2017 to increase transportation funding. Read a summary of the other state gas tax increases legislatively approved this year below.