The NCSL Blog

14

By Kevin Pula

Lawmakers around the country are already facing heavy traffic in transportation committees.

Truck on highwayThe perennial debate surrounding state transportation revenues did not subside after Congress passed a five-year federal transportation package. The need for transportation funding continues and states are exploring a variety of mechanisms to help find a solution.

Motor Fuel Tax Legislation

From 2013 to 2015, 18 states and D.C. enacted legislation to increase or restructure their motor fuel taxes. So far in 2016 many statehouses are considering similar legislation, at least 11 states—Alaska, California, Hawaii, Indiana (gas tax provisions passed the House but were removed by the Senate), Minnesota, Missouri, New Jersey, New Mexico (failed due to adjournment), South Carolina, Utah and Vermonthave introduced legislation to increase gas taxes.

Electric Vehicle Fees

As states consider how to adapt to a changing U.S. vehicle fleet, some state policymakers are looking for new ways to maintain funding for transportation infrastructure projects. While electric vehicle adoption remains low—less than 1 percent of the total vehicle fleet—falling vehicle costs and state incentive programs may continue to drive consumers to these technologies, potentially resulting in lower gasoline tax revenues.

Last year, Georgia, Idaho, Michigan and Wyoming enacted fees on certain hybrid and electric vehicles—the most in one year to date. In total, 10 states currently impose fees as a way to recapture lost gas tax revenue.

In 2016, lawmakers in at least nine states—California, Hawaii, Illinois, Indiana, Kansas, Kentucky, New Hampshire, Tennessee and West Virginia—have introduced legislation to establish special registration fees on hybrid or electric vehicles. If passed as introduced, Illinois, Kansas and West Virginia would adopt fees greater or equal to Georgia’s $200 per year fee—currently the highest in the country. Additionally, Idaho and Missouri have introduced measures that would remove or decrease their existing fees on hybrid vehicles, and legislation in Wyoming will require the one-time decal fee passed last year to now be charged annually.

Road Use Charges (RUCs)

In recent years a growing number of states have begun to explore the potential benefits and shortfalls of more closely tying road funding to actual use of roadways by drivers. Following in the footsteps of a number of pilot programs, most notably Oregon’s OreGo program, lawmakers have introduced legislation in 2016, including:

  • Illinois SB 3267 seeks to implement a statewide RUC program and provide refunds to drivers for any motor fuel taxes paid.
  • Kentucky HCR 27 creates the mileage-based transportation funding task force to study and develop a RUC funding mechanism.
  • New Hampshire HB 1602 establishes a RUC based on a combination of vehicle miles traveled and the miles per gallon of the vehicle.
  • Washington HB 2956 establishes a legislative task force on transportation technology, which, among other tasks, will study RUC mechanisms.

California is in the process of rolling out the California Road Charge pilot program. Heavily informed by the OreGo program and commissioned by 2014 legislation, this 5,000 vehicle volunteer program will serve as a proof-of-concept for a RUC funding mechanism in California.

The Colorado Department of Transportation is currently in the process of establishing a small, 100 vehicle, RUC pilot program.

Tolling

At least 21 states are considering legislation related to tolling, either for the addition/removal of tolls, managed lanes, or providing exemptions to certain vehicles. Most notably, Rhode Island enacted SB 2246 and HB 7409, which will implement Governor Raimondo’s RhodeWorks program and charge tolls on commercial trucks traveling across the state.

Other

These are not the only funding approaches being considered by legislatures, local option taxes (Massachusetts, Nevada, Oregon and Wisconsin), transportation lockboxes (New Jersey, Oregon and West Virginia) and tweaks to allocation formulas are up for debate.

Additionally financing strategies such as public-private partnerships (Florida, Hawaii, Illinois, Kentucky, Michigan, Missouri, New Hampshire, New Jersey, Rhode Island, Tennessee and Washington), bonding (Connecticut, Delaware, Florida, Idaho, Kansas, Massachusetts, Washington and West Virginia) and state infrastructure banks (Nebraska, New Jersey and New York) are being considered in transportation committees around the country.

NCSL’s Transportation Funding and Finance Legislation Database tracks related legislation from all 50 states, D.C. and Puerto Rico. This searchable database contains bill information on all the legislation discussed in this blog post and much more.

Kevin Pula is a policy associate with NCSL’s Transportation Program.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.