The NCSL Blog


By Mark Wolf

Just a day after the White House said it was considering supporting a bump in the federal gasoline tax, a trio of state legislators at NCSL's State Transportation Leaders Symposium detailed some innovative approaches to raising transportation fund using the motor fuel tax.

From left, Representative John Torbett (R-N.C), Representative Carolyn Dykema (D-Mass.) and Senator Steve Gooch (R-Ga.).When North Carolina Representative John Torbett (R) started looking at the gas tax in his state, he was convinced of the folly of basing a funding mechanism on such an unstable commodity. The current gas tax formula, he said, "was declining on a death spiral."

Instead of raising the gas law, lawmakers actually cut the rate but changed the formula so that, beginning next year, the rate will change based on a formula that considers population rate growth (75 percent) and energy cost inflation (25 percent). Even with a consumption rate projected to drop by a billion gallons per year over the next decade, the state will still see revenue increases, Torbett said.

A frequently cited example of the unpopularity of raising motor fuel taxes is Massachusetts' experience. The legislature increased the gas tax in 2013 and tied future rates to inflation, "which would meet most if not all of our transportation needs," said Representative Carolyn Dykema (D), "but within a year a very small but active group of individuals put together a campaign to repeal the inflation factor." The repeal initiative won with 53 percent of the vote.

Tolling, she said, "is getting more and more attention" as a funding source. The state has two tolled major interstates and some would like to expand it statewide using all-electronic tolling, which, she said, is not only more convenient but opens up opportunities to do congestion tolling and change rates around the time of day when people are traveling.

Prior to 2015, Georgia's gas tax hadn't been raised in 20 years, said Senator Steve Gooch (R), who was on the state's Department of Transportation board before being elected to the Senate. The legislature tried to form regional sales tax districts for transportation funding in 2012 but only three districts passed them. Gooch's district defeated it by more than 75 percent.

Georgia created a joint House-Senate study committee and members traveled the state in 2014 looking at places that needed the money most. Most notably, the state wound up increasing the motor fuel tax and indexing future tax rates to the average fuel economy of the state’s registered vehicles. Additionally they repealed tax credits for electric cars ("We gave everyone who bought one a $6,500 tax credit. You could lease a Nissan Leaf for no out-of-pocket money) and replaced it with a $200 fee and repealed an aviation fuel tax credit.

"It's been a very successful plan. We leverage about $1 billion a year from that. There is a lot of political risk," he said. "All our Senators in the northern part of the state got primaried but we all survived."

If reliance on the gas tax alone to fund transportation projects isn't dead, it has its own room in the intensive care unit, panelists indicated.

"If everybody doesn't think (electric vehicles) is the greatest revolution since the horseless carriage, you're misguided," said Torbett. One issue rising from the growth of electric cars is the easy availability of what Torbett called "a gallon of electricity," from monopolized electrical providers.

Dykema wondered how autonomous vehicles are going to affect revenue: "It's mind-boggling how we have to change our thinking."

Fairness is also a factor, she said, for a state like Massachusetts which spends money not only on roads and bridges but on a very significant public transit system.

"Very rural communities have no access to public transportation but a lot of people in Boston use public transportation more than cars. It creates some equity challenges," she said. "The gas tax is a regressive tax for those who don't have access to public transportation."

Gooch said he didn't believe "one silver bullet is going to work for all states.

"We're a little unique (in Georgia). We like our cars, we like our trucks, we don't have a lot of transit. We do have a lot of people buying big SUVs and heavy trucks. Some states are buying more fuel-efficient vehicles."

He said he didn't believe in tolling previously-built roads but there were plans to add express lanes and use tolls as a way to pay for them."

In North Carolina, Torbett said, the state has made the Department of Transportation adopt a customer service mode, with a mandate to fix potholes within 48 hours of being notified of one.

Mark Wolf is editor of the NCSL Blog.

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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.