One of the challenges states face when addressing transportation funding shortfalls is that a flat excise tax on motor fuel does not change, while project costs, inflation, and other factors lead to rising costs in road and bridge construction and maintenance. Several states have tried to address the issue by replacing their flat excise tax with a variable-rate motor fuel tax. A variable-rate motor fuel tax adjusts the cents-per-gallon charge at the pump based on the wholesale price of fuel, general economic inflation, or other circumstances like population change and average vehicle fuel efficiency.

A report released last month by the American Road & Transportation Builders Association’s “Transportation Investment Advocacy Center”™ (ARTBA-TIAC) includes model statutory language to provide a long-term, stable transportation funding source by creating a variable-rate state motor fuel tax. It also includes best practices and lessons learned from states around the country who have implemented a variable-rate motor fuel tax.

“One of the key issues facing state and local officials today is identifying sustainable transportation funding choices,” said Seth Millican, executive director of the Georgia Transportation Alliance and co-chair of the Transportation Investment Advocates Council. “The model language outlined in ARTBA’s report can be a starting point for state legislators and advocates who are interested in developing a reliable, long-term transportation-related revenue stream through a variable rate gas tax.”

Currently, 18 states have a variable-rate motor fuel tax. Two other states charge a state sales tax on the sale of motor fuel.

This is the second model language report ARTBA-TIAC has produced. The previous report, “Model Statutory Language: Helping Ensure Electric & Hybrid Vehicles Are Fully Contributing to the Maintenance of America’s Transportation Network,” provides language to raise state transportation revenues through registration fees on electric and hybrid electric vehicles.

The model statutory language reports are created with the assistance of a volunteer committee formed through the “Transportation Investment Advocates Council,” a network of more than 70 business professionals and public officials who share a common interest in building support for transportation infrastructure investments in their state or local community.

View the report.

Established in 2014, TIAC is a first-of-its kind, dynamic education program and Internet-based information resource designed to help private citizens, legislators, organizations and businesses successfully grow transportation investment at the state and local levels through the legislative and ballot initiative processes.

If you would like to contribute to these efforts, please contact Carolyn Kramer.