Just in Time for the Holiday, 8 States Raise Gas Taxes

Posted By Ryan Holeywell | July 1, 2013

Drivers hitting the road for the Independence Day holiday will encounter higher gas taxes in eight states, according to data compiled by Citizens For Tax Justice.

While the changes could frustrate drivers -- if they notice the slight hikes -- there's a silver lining: many states only raised their gas taxes after going years without changing them at all. Lawmakers across the country say gas tax increases are needed to pay for important infrastructure work that would otherwise not occur without the extra revenue.

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Gas tax increases are also largely viewed as a way states are responding to the federal government's failure to find big, new sources of infrastructure funding. While eight states increased their gas taxes Monday, the federal gas tax has remain unchanged for 20 years.

The biggest gas tax hike Monday occurred in Wyoming, where overnight, it rose from 14 cents to 24 cents per gallon. The hike, a priority of Gov. Matt Mead, will bring in an extra $70 million annually for transportation projects.

Other states with gas tax hikes that took effect this week include:

Maryland, where gas taxes go up after the legislature earlier this year added a sales tax on top of the existing gas tax.
Connecticut, where gas taxes increase due to a 2005 law.
California, Kentucky, Georgia and North Carolina, where gas tax rates are pegged to the cost of gasoline, which is rising.
Nebraska, where the gas tax is tied to both the rising price of gasoline as well as the rising amount of state transportation spending.

There are 16 states total where gas taxes are tied to a mechanism to ensure they rise in concert with the base price of gas or inflation. Citizens for Tax Justice writes:

It seems that more states are finally recognizing that stagnant, fixed-rate gas taxes can’t possibly fund our infrastructure in the long-term and should be abandoned in favor of smarter gas taxes that can keep pace with the cost of transportation.

Meanwhile, two states will actually see their gas taxes drop. Vermont's dips slightly due to a new formula adopted by the legislature earlier this year -- but it comes on the heels of a six-cent hike that took effect immediately after the law was passed earlier this spring.

Virginia's gas tax,meanwhile, plummets by more than 6 cents due a shift towards the use of sales taxes to fund infrastructure.

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