States Weigh Sales, Fuel Tax Hikes

The number of states seeking to generate transportation revenues by increasing sales taxes or state motor fuel taxes is growing, with lawmakers in Missouri and Washington marking the latest to introduce such legislation.

In Missouri, Senators last week endorsed a proposed penny sales tax increase that could raise nearly $8 billion over a decade for transportation projects. The increase would require voter approval and, if passed, would be resubmitted to the ballot after 10 years so Missourians could decide whether to continue it. Sen. Mike Kehoe said the gas tax would need to rise 20 to 25 cents to generate equivalent revenue.

The sales tax proposal was given first-round approval and needs another affirmative vote before moving to the House. A House committee has embraced a similar measure. Under the Senate measure, 10 percent of the revenue would go to cities and counties. When the sales tax is in effect, voter approval would be needed to change the gasoline tax rate or place tolls on existing roads and bridges.

In Washington, a 10-cent increase in the state’s fuel tax over five years is part of a $9.8 billion transportation funding package introduced in the legislature. The funding plan would raise the 37.5 cent tax on diesel and gasoline by 2 cents in each of the next five years.

In New Hampshire, a legislative committee was asked to consider recommending a smaller tax hike — or no hike at all — on gasoline and diesel fuel than the 15-cent increase proposed under a bill to raise revenues to finish an Interstate 93 expansion and for other highway improvements.

The bill, sponsored by Rep. David Campbell of Nashua, would raise the tax from 18 cents a gallon to 33 cents a gallon. The tax has not been changed for 22 years. Under the bill, the increase would be phased in over four years on gasoline and six on diesel. The House Ways and Means Committee held a hearing on the bill last week, and is expected to vote on the tax proposal on Tuesday, with the full House votes on the measure later this month.

Wyoming was the first state this year to raise its fuel tax, raising its tax to 24 cents per gallon from 14 cents on Feb. 15. It was the first increase in the state’s gasoline tax in 15 years.

Governors in Michigan, Pennsylvania, Maryland and Vermont also recently have proposed raising fuel taxes.

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