This year, consumers are enjoying significant savings at the pump, as most Americans are paying almost $1.00 less per gallon than they were in 2014. Unfortunately, many state leaders are using this as an excuse to increase gas taxes. July 1st marked the start of many states’ fiscal year, and according to the Institute on Taxation and Economic Policy, the start of increased fuel tax rates in six states. These hikes are extremely harmful adjustments for taxpayers during the busy summer travel season. The additional funds described below will be collected in addition to revenues brought in by the federal government via its 18.4 cent per gallon gas tax charged to all U.S. drivers.
Idaho’s fuel tax is increasing for the first time since 1996, from 25 to 32 cents per gallon. This 7 cent per gallon increase is the largest gas tax hike in the country. The second biggest is Georgia's change from a mix of taxes totaling about 19.5 cents to a flat 26 cents per gallon excise tax. In addition, Rhode Island is raising its fuel tax by a penny to 34 cents per gallon, while Maryland taxpayers will face a 1.8 cent increase due to a 2013 law that indexed its tax to inflation. Similarly, taxes are increasing by 2 cents per gallon in California, and Nebraska drivers will see a half-cent increase per gallon.
The United States Congress must also pass a law to ensure the Federal Highway Trust Fund remains solvent after July 31. By ruling out increasing the federal gas tax as a way to replenish the Highway Trust Fund, House Speaker Boehner and Senate Majority Leader McConnell are wisely taking a different route than certain states.