Lawmakers Considering New Methods to Offset Declining Fuel Taxes

With new vehicles become more fuel efficient, and people spending less time behind the wheel, some lawmakers are looking for new ways to offset falling revenues from fuel taxes which are used to care for our aging roads and bridges.

Some lawmakers have suggested increasing the existing gasoline tax, while others have recommended imposing new fees on all-electric vehicles. Some have recommended taxing motorists based on miles traveled, and some see toll roads could be the solution.

The debate over how to deal with falling gas tax revenues is especially heated in some Northeastern states. Massachusetts House Minority Leader Bradley Jones recently lobbied unsuccessfully for a state registration fee on all-electric vehicles.  Jones says, “That person who switches to an all-electronic vehicle, they’re paying nothing for the benefit of the upkeep, maintenance, and filling of potholes on the roads.  The issue,” he contends, “is really one of equity.”

Less than one year ago, Massachusetts increased the state gas tax by three cents, but the issue will be on the ballot again this November.

The U.S. Energy Information Administration reports that sales of alternative energy vehicles, including hybrids, AEVs and fuel cell vehicles are expected to more than double in New England by 2014, which will result in even lower gas tax revenues.

Massachusetts Representative Jones’ proposed legislation would have required all-electric vehicle owners to pay a $100 annual fee to offset lost revenues from the state’s gasoline tax. Although the proposal found little support from other lawmakers, Jones insists it’s an issue that will have to be confronted eventually.  “You’ve got to have that discussion,” says Jones. “If everybody ultimately switches over to electric cars, what would you do?”

Director of Transportation for Massachusetts Kristina Egan agrees that the issue can’t be “kicked down the road.” “We are going to continue to rely on the gas tax for quite a while to maintain the safety of our roads and bridges,” said Kristina Egan, who adds, “It is really important for us to start exploring sources to supplement the gas tax as cars become more fuel-efficient.”

Last year, lawmakers increased the Massachusetts gas tax by 24 cents per gallon on the grounds that the increase was designed to automatically matched inflation rates.  Opponents of the measure have collected more than 100,000 signatures in their push to repeal the measure in next November’s election.

Another approach, supported by Massachusetts Secretary of Transportation Jeffery Mullan, would be to increase tolls.  Mullan says, “We need to develop a new proxy, and for me, the easiest and most useful option — and the one users are more familiar with — is tolling.”  The Obama administration recently proposed doing away with restrictions on how much states can charge for interstate travel on toll roads.

In another approach, Oregon recently adopted a 1.5 cents per mil tax that would be the equivalent of a 30 cents per gallon gasoline tax.

Regardless of how they go about it, federal and state governments will undoubtedly come up with ways to replace the dwindling revenues generated by the current gasoline taxes.


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