While Washington’s Efforts to Fund Roads Go Nowhere, Red States Are Raising Gas Taxes

In about six weeks, federal money to keep the Highway Trust Fund going will once again dry up and Congress will begin its predictable scramble to keep cash flowing to roads, bridges, and transit projects.

The reason for the gridlock: Neither Congress nor President Obama is willing to back a gas tax sufficient to fund the program, and neither has come up with a credible alternative. But while new gas taxes are anathema in Congress and the White House, lawmakers in a half-dozen states have been willing to boost their motor fuel levies to fix or build public infrastructure, and several other legislatures are still debating the idea.

What’s most interesting: Five of the six states that have enacted gas tax hikes this year are bright red. One is purple. Courtesy of the American Road and Transportation Builders Assn, which tracks such things, here is a partial list of state actions through May:

• Georgia: Revised its gas tax formula, raised the levy by six cents-a-gallon, and boosted some vehicle fees to raise $900 million annually.
• Idaho: The legislature approved a seven cent-per-gallon fuel tax increase and higher vehicle registration fees.
• Iowa: The legislature has approved a 10 cent-a-gallon gas tax hike.
• Nebraska: Raised gas taxes by six cents over four years.
• South Dakota: Approved a six cent gas tax hike, a 1 percent motor vehicle excise tax and higher license fees, and local authority to raise fees to fund roads.
• Utah: Passed a five-cent increase at the pump, a 12 percent alternative tax on the wholesale price of gas that is triggered at $2.45, and new local authority to raise taxes to fund infrastructure.

In addition, legislatures in Louisiana, South Carolina, and California are considering gas tax hikes. And in perhaps the most interesting state initiative of all, this month Oregon begins its voluntary road usage charge (OReGO), a 1.5 cent-per-mile levy. Users get a credit to offset gas taxes they pay at the pump.

Of course, not all states are raising transportation taxes. Earlier this year, Michigan voters crushed a ballot initiative aimed at boosting sales and gas taxes to pay for roads and transit. And several states are increasing spending for roads without raising current taxes by, for example, authorizing more bond financing.

Still, the contrast is striking between Congress and those states willing to hike their gas taxes to pay for much-needed infrastructure.

Congress and the White House remain stuck in the break-down lane. House Ways & Means Committee Chair Paul Ryan (R-WI) promises new ideas next week, but the betting is Congress will end up sticking another temporary, gimmick-laden patch on the problem.

There are at least two possible lessons to all of this: One: Voters will swallow state gas tax hikes but not new federal taxes. Or, two: State legislators just have more courage than their congressional counterparts.