States Grapple with Fuel Taxation
As state governments seek the best avenues to fund their highway infrastructure spending this year, many governors and legislators are looking closely at where making changes to motor-vehicle fuel taxation may get them.
For example, legislation moving through the Georgia statehouse to raise $1 billion to fund transportation would lower the state’s fuel taxes by implementing new “excise taxes,” per an Associated Press news report.
Those might include a new $25 highway-user fee applied when license tags are renewed and a new $5 rental car fee as well as rolling back a sales-tax “holiday” on back-to-school purchases.
In addition, the Senate version of the bill would annually move $250 million from the state’s general fund to pay off debt service owed by the Georgia Department of Transportation.
Also this week, Kentucky transportation officials confirmed that the state’s gas tax rate will fall by more than a nickel a gallon on April 1, according to a news report posted by The Courier-Journal.
Determined to head off that funding falloff before the current legislative session ends, Gov. Steve Beshear (D) reportedly said that letting the rate drop would cost Kentucky “hundreds of millions of dollars” in revenues needed for state and local highway projects.
Unless Kentucky legislators act, the tax rate will slip as it is adjusted quarterly based on the wholesale price of gas. Declining gas prices brought the rate down on Jan. 1st from 31.9 cents to 27.6 cents per gallon.
Per this quarter’s survey of gas prices, the rate will fall to 22.5 cents come April, according to Chuck Wolfe, spokesman for the Kentucky Transportation Cabinet.