Road Worries: Sagging Gas Tax, Rising Traffic Safety Woes

bicycle rider sharing lanes with vehicle traffic in busy urban area

Lawmakers hope to reduce traffic crashes and fatalities, which are near all-time highs, particularly for pedestrians, bicyclists and motorcyclists.

The enactment nearly a year ago of the $1.2 trillion Infrastructure Investment and Jobs Act ensures that states will receive hundreds of billions of dollars in federal transportation funding over the next five years. This unprecedented investment flows from the bill’s new transportation programs—for bridge replacement, passenger rail and electric vehicle charging—and from its support for existing road, transit and traffic safety programs.

Forecast ’23

This story is part of a State Legislatures News special report examining the hot topics and legislative trends that will dominate state lawmakers’ time in 2023.

Forecast home

In 2023, lawmakers will continue to debate how best to position their states to benefit from the new funding by identifying matching funds, creating or amending statutory authorities and overseeing executive branch implementation.

In the decade to come, states are likely to intensify their study of alternate transportation user fees and dedicate more general fund dollars to transportation projects.

Hot Topic—Augmenting the Gas Tax

Electric vehicles and other highly fuel-efficient vehicles are powerful tools to help states meet clean energy goals and reduce air pollution. But they can cause headaches for transportation agencies trying to maintain roadways. The reason: The vehicles use little or no gas, and the motor fuel tax makes up the largest share of state transportation revenue—38.4% in 2022, down from 41.1% in 2018, according to the National Association of State Budget Officers.

Forecasts indicate states will lose even more gas tax revenue as vehicles become more fuel efficient, with states predicted to lose as much as $87 billion in revenue by 2050 (see chart below). Despite high summertime gas prices and a few states adopting temporary gas tax holidays in 2022, states continue to act in response to declining revenue. Solutions proposed or enacted so far include road usage charges and per-kilowatt hour fees for public EV charging stations. Some states, including Idaho, Louisiana and North Carolina, have recently devoted more general fund revenues to transportation purposes.

Gasoline tax revenue lost to vehicle fuel efficiency will grow chart

Trending: Voluntary Road Usage Charges

To address declining revenues, Oregon, Utah and Virginia lawmakers all created voluntary road usage charging, or RUC, programs, an alternative to the gas tax that charges drivers based on their miles traveled. Virginia passed two RUC bills in 2022 (SB 237 and SB 612) that added privacy protections, ensuring that data from the state’s mileage choice program cannot be sold or distributed and requiring that program participants may opt out of location tracking. The Utah Legislature refined its RUC program in 2022, setting a cap on annual fees and making the usage charging rate 1 cent per mile until 2026.

Another strategy to address falling gas tax revenues is to charge users of public EV charging stations a per-kilowatt hour fee based on the energy they consume to charge their vehicles’ batteries. At least four states—Iowa, Kentucky, Oklahoma and Pennsylvania—have enacted such fees, with each allocating most of the revenue collected to transportation infrastructure projects such as road and bridge maintenance.

Washington enacted a major transportation package known as Move Ahead in 2022. The bill provides additional transportation revenue from the state’s carbon fee, an increase in fees for services such as issuing vehicle license plates, one-time general fund transfers, and the federal infrastructure law. Large investments in transit, bridge replacement and repairs, high-speed rail, active transportation and the state’s large ferry system are all part of the Move Ahead package.

Hot Topic—Traffic Safety

Traffic crashes and fatalities are near all-time highs, particularly for pedestrians, bicyclists, motorcyclists and other vulnerable road users. The upward trend accelerated during the pandemic, as nearly 39,000 people lost their lives on U.S. roadways in 2020 and an estimated 43,000 died in 2021. The problem is rooted in a combination of issues including excessive speeding, impaired driving and neglecting to wear seat belts—the three greatest factors in the recent increase in fatalities.

Ongoing traffic safety interventions include installing red-light and speed cameras and giving local governments more flexibility to lower speed limits. States are also toughening penalties for impaired driving while focusing on testing methods to combat polysubstance-impaired driving, a risky behavior that involves operating a vehicle after consuming a mix of drugs or drugs and alcohol. Meanwhile, lawmakers hope to curb distracted driving by raising fines and providing more transparency to existing laws to increase driver compliance. Currently, 48 states ban texting for all drivers and 24 prohibit all drivers from using hand-held mobile devices while driving.

Moving forward, lawmakers are likely to continue addressing road fatalities, as well as using programs created by the federal infrastructure law for financial and technical assistance.

Bipartisan Bills: Transportation

To address transportation revenue declines, the North Carolina legislature (HB 103) dedicated a portion of sales tax revenue to road and highway projects. The bill transfers 2% of general sales tax dollars to two highway funds, with the transfer rising to 6% of sales tax revenues starting in fiscal year 2024-25. “The portion of sales tax going to two highway funds would triple by mid-2024,” The Associated Press reported. The bill also created a strategic funding plan for transportation investments and transferred $107 million in increased sales tax revenue and $250 million from the Economic Development Project Reserve, respectively, to the Department of Transportation for roadwork and associated wetlands mitigation needed to support the projects.

Final vote count: 36-8 in the Senate, 82-25 in the House.

Bipartisan Bills: Traffic Safety

To address the increasing number of crashes involving drugged driving, the Colorado Legislature (HB 1321) required the state Department of Transportation to study and report on the viability of devices that can detect the presence of drugs during roadside sobriety checks. The report, due by June 1, 2023, must also include legislative recommendations regarding a pilot program to further analyze the devices.

Final vote count: 54-11 in the House, 32-2 in the Senate.

For more, see these NCSL transportation resources:

State Road Usage Charges Toolkit
NCSL Summit presentations: Road Usage Charges
Infrastructure Investment and Jobs Act: Transportation Resources
Traffic Safety State Bill Tracking Database
2021 Traffic Safety Trends Report
“Our American States” podcast: Grappling With the Traffic Safety Crisis Podcast
Drunken Driving Webpage
Distracted Driving Webpage
State Speed and Red-Light Camera Laws and Programs
Video: Safe Roads for Everyone: State Efforts to Protect Vulnerable Road Users
State Legislatures News

Road Worries: Sagging Gas Tax, Rising Traffic Safety Woes

Forecast ’23: The top issues in transportation for the 2023 legislative session.

Forecast ’23

Hot Topic—Augmenting the Gas Tax

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