Gasoline Taxes: An Examination of News Media Discourse Related to Gas Tax Funding Debates in Six States
The transportation system in the United States is funded primarily by state and federal gasoline taxes. Gasoline taxes provide 90 percent of the funds in the Highway Trust Fund (HTF) and substantial portions of state transportation budgets (1, 2). But increasing gasoline taxes, even to maintain pace with inflation has proven to be extremely difficult. At the federal level, legislators have increased gasoline taxes just three times in the last 40 years. At the state level, while 15 states increased gas taxes between 1997-2009, the small increases (usually under 5-cents per gallon) lag behind estimated funding needs (3). The lack of substantial increases in gasoline tax revenues combined with increased vehicle miles traveled (VMT) have led to a massive funding shortfall for the transportation system. The National Surface Transportation Infrastructure Financing Commission reports the federal funding gap in the Trust Fund could reach $2.3 trillion over the coming 25 years (4).
Combined state and federal gasoline taxes in the United States average 40.4 cents per gallon, far lower than most industrialized nations (3). The purchasing power of the 18.4 cents federal gas tax has declined 33 percent since it was last increased in 1993 (4). In a number of states, doubling the gas tax would bring the state to 1957 funding levels without adjusting for additional need due to increased VMT, aging infrastructure and added populations (5). The present shortfall between transportation-related revenues and expenses is estimated at between 20 and 70 cents a gallon (2, 5, 6).
One solution to the projected funding crisis is to increase gasoline taxes and invest the increased revenue in the transportation system. Economists broadly agree that raising the gas tax is an effective mechanism for raising revenue if monitoring and administrative costs are low (5). Yet raising gas taxes in the U.S. is extremely difficult for political leaders (7). Despite the projected deficit in the Highway Trust Fund, the Obama administration removed the gasoline tax as a funding source in 2009 (8). At the state level, policy-makers have instead increased transportation fund revenues by turning to vehicle registrations, tolling, purchase and use taxes and other fees. The political challenges involved in raising the gas tax at the state level continue.
For example in January of 2009, legislators and chief executives in as many as 15 states were proposing legislation to raise gasoline taxes. With gasoline prices averaging half of their July 2008 peak, and states facing massive budget deficits in operating budgets and transportation accounts, increasing gas taxes became a logical option. However, by the end of June, only three state legislatures had approved gasoline tax hikes; Oregon, Rhode Island and Vermont. The debate continues in several others.