States active in pursuit of transportation revenue

By Keith Goble, Land Line state legislative editor | Monday, May 06, 2013

For much of the past decade state lawmakers have been reluctant to push for any type of tax increase to benefit transportation. Actions this year at statehouses across the country show there is no more hesitancy.

Other options would protect what already is available for roads, bridges and transit.

Reasons cited for the stateside tax push include changing driving habits, more fuel-efficient vehicles, increasing construction costs, and fewer dollars available from the federal government.

As a result, about half of all states have spent time this year considering and/or approving legislation to increase, prioritize or protect transportation funding.

At least 14 states have discussed collecting more tax at the fuel pump. The average increase sought at statehouses stretching from Washington to New Hampshire nears 10 cents per gallon.

Elected officials in Virginia and Maryland went outside the box to address transportation funding needs. Spurred by Gov. Bob McDonnell’s initiative to overhaul how the state collects taxes for roads, bridges and transit, state lawmakers on both sides of the aisle endorsed a plan to convert the state’s 17.5-cent-per-gallon excise tax on gas and diesel into a wholesale tax – which allows the tax rates to rise with inflation.

“We have worked together across party lines to find common ground and pass the first sustainable long-term transportation funding plan in 27 years,” McDonnell said in prepared remarks about the tax change takes effect July 1.

OOIDA Executive Vice President Todd Spencer commended Virginia lawmakers and officials in other states for addressing the challenges facing transportation funding and the structural challenges of heavy reliance on the state’s fuel tax.

Across the Potomac River, Maryland lawmakers approved changes sought by Gov. Martin O’Malley to apply an initial 1 percent sales tax to fuel purchases at the wholesale level. The sales tax rate could later rise to 5 percent.

In Missouri, a 10-year, one-cent general sales tax for transportation work is getting a long look. Voters would get the final say on the issue, which includes a prohibition on tolls or a fuel tax increase for the next decade.

Sen. Wayne Wallingford, R-Cape Girardeau, told lawmakers during recent discussion that highway accessibility is the most important factor in the state’s economic development.

“If we want to continue to draw economic development to Missouri, we need to take care of our infrastructure,” Wallingford said.

Wyoming lawmakers took the conventional route to raise revenue. Gov. Matt Mead’s push for a 10-cent-per-gallon fuel tax takes effect July 1.

North Carolina Gov. Pat McCrory is sticking to a campaign pledge to leave taxes unchanged. Instead, he wants to implement a formula that would benefit priority projects.

“We need a strategic way to connect all North Carolinians to greater opportunities in a way that gives us the most bang for our limited dollars,” McCrory stated.

Another option pursued at statehouses is to prevent raids on transportation revenue. Some states are working on efforts to amend their constitutions to prevent diversions.

In Wisconsin, where an estimated $1.2 billion was swiped from the transportation fund over a 10-year period, voters will get to decide in fall 2014 on the proposed amendment.

State Sen. Jerry Petrowski, R-Marathon, said the amendment provides a guarantee to taxpayers that future transportation revenue will be used as intended.

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