About one-third of the states have taken action this year to boost funding for transportation or shore up their road and bridge funds against excepted declines in tax revenues. Here’s a look at what those states have done.
Legislation signed June 30 by Democratic Gov. Dannel P. Malloy authorizes $2.8 billion of bonding that will be combined with existing funds under a special $10 billion, five-year transportation plan. The bonds will be repaid, in part, by diverting one-half cent of Connecticut’s existing general sales tax to a transportation fund. The program is just the start of what Malloy hopes will become a 30-year, $100 billion overhaul of the state’s transportation system.
Legislation signed by Democratic Gov. Jack Markell increases the tax on vehicle sales from 3.75 percent to 4.25 percent and raises various fees, such as for late vehicle and driver’s license renewals. Revenues from the higher taxes and fees, which take effect Oct. 1, will allow for additional bonding. The measure is expected to generate $330 million over six years for transportation.
Legislation signed by Republican Gov. Nathan Deal is projected to raise an average of $1 billion annually over the next five years for transportation. Starting July 1, it converted the state’s current mix of fuel taxes to a new tax of 26 cents a gallon on gasoline and 29 cents on diesel. It also imposed a new $200 fee on electric vehicles, eliminated a $5,000 tax credit for buying electric cars; imposed new fees of $50 to $100 on heavy trucks; charged $5 per night on hotel stays; and ended a tax break on jet fuel at Atlanta’s Hartsfield-Jackson International Airport.
Legislation signed by Republican Gov. C.L. “Butch” Otter raised the state fuel tax by 7 cents a gallon and vehicle registration fees by $21, effective July 1. That’s projected to generate $95 million annually for transportation. But the new revenues likely will be higher, because the law also allows a percentage of the year-end surplus in the state’s general fund to be used for transportation. This year, that meant an additional $54 million for transportation.
Legislation raising Iowa’s fuel tax by 10 cents a gallon took effect March 1, just days after it was signed into law by Republican Gov. Terry Branstad. The fuel tax increase, which is the state’s first since 1989, is projected to raise $215 million annually for roads and bridges.
Legislation signed by Democratic Gov. Steve Beshear blocked most of a gas tax reduction that had been scheduled to take effect April 1 under an existing law linking the state’s tax rate to wholesale fuel prices. Instead of falling from 26.2 cents a gallon to 22.1 cents, the fuel tax rate was frozen at 26 cents a gallon by the legislation. The measure averted much of a projected $150 million cut to the road fund.
A measure referred to the Oct. 24 ballot by the Republican-led Legislature would change the state’s “rainy day” fund to direct money toward transportation when revenues exceed certain thresholds. It’s estimated to generate $21 million over the next five years and as much as $100 million annually in later years. Lawmakers also passed a measure capping how much gas tax money can be diverted to state police from a transportation fund.
A measure referred to the Nov. 3 ballot by Maine’s politically split Legislature would authorize up to $85 million of bonds, including $68 million for roads and bridges and $17 million for other modes of transportation. The new state revenues would be used to match more than $121 million of funding from the federal government and other sources.
Legislation signed April 22 by Republican Gov. Phil Bryant authorizes $200 million of bonds to rebuild deficient bridges. The bonds are to be repaid with an estimated $36 million annually from existing taxes on casinos.
The Legislature, which is officially nonpartisan but dominated by Republicans, voted May 14 to override Republican Gov. Pete Ricketts’ veto of a bill gradually increasing the fuel tax by 6 cents a gallon over four years. The measure, to take effect Jan. 1, is projected to generate about $215 million over the first five years and about $76 million annually when fully phased in.
Legislation signed June 5 by Republican Gov. Brian Sandoval and referred to the November 2016 ballot would allow counties to link their local fuel taxes to the rate of inflation. If approved by voters, the measure could lead to millions of additional dollars for transportation.
Legislation signed by Republican Gov. Pat McCrory slightly reduces the fuel tax but averts a larger, projected 7-cent decline that had been expected to occur July 1 because of lower fuel prices. The new law dropped the state’s tax from 37.5 cents a gallon to 36 cents April 1 and will reduce it to 34 cents by July 2016 while also changing future inflationary calculations. The state is projected to lose $81 million of gas tax revenues this year under the new law, instead of the previously expected reduction of $345 million.
Legislation raising fuel taxes by 6 cents a gallon took effect April 1. The new law also raised vehicle sales taxes and license fees while increasing the speed limit to 80 mph on two major interstate highways. The law is expected to generate $85 million its first year and around $400 million over five years for transportation.
A proposed constitutional amendment referred to the Nov. 3 ballot by the Republican-led Legislature would redirect existing taxes to transportation. The state highway fund would gain $2.5 billion annually from general sales tax revenues starting in September 2017. It also would gain 35 percent of vehicle sales tax revenues above a certain threshold, starting in September 2019.
Legislation signed by Republican Gov. Gary Herbert will link Utah’s tax to the price of fuel, effective Jan. 1, instead of the current per-gallon tax. It’s projected to generate $25 million the first year and about $75 million annually thereafter. The new law also allows counties to put a one-quarter cent sales tax on the ballot this fall, which could raise millions more for local transportation projects.
Legislation signed July 15 by Democratic Gov. Jay Inslee raised the fuel tax by 7 cents a gallon on Aug. 1 and will raise it an additional 4.9 cents in July 2016. The new law also authorizes additional bonding and raises various fees, including on vehicle registrations. The package is projected to generate $16 billion over 16 years for transportation.