State Rundown 9/30: The Gas Tax Cometh?

Political leaders in New Jersey could be close to figuring out a fix for the state’s transportation funding crisis. The Transportation Trust Fund is set to run out of money soon, and Gov. Chris Christie has declared that all options are on the table — including, perhaps, an increase in the gas tax, which is currently second lowest in the nation (it has been more than 20 years since the tax was increased). The pledge represents a softening of the governor’s position; he has opposed any increase in the gas tax in recent years, and has also raided the trust fund to balance the state budget. State lawmakers could also consider indexing the gas tax to inflation, as they’ve done in Massachusetts, or applying the state’s sales tax to gasoline purchases, as advocated by New Jersey Policy Perspective, a leading nonpartisan think tank in the state.

The president of the South Carolina Chamber of Commerce recently announced that his group would support the first state gas tax increase in over 25 years (lowest in the nation — take that New Jersey). Otis Rawl says the chamber will push for a 1-cent-per-year increase for the next 10 years to address the state’s crumbling infrastructure, citing a poll that shows a majority of the state’s Republican voters would support such a measure. Both candidates for governor are on the record as opposing an increase in the gas tax, though their alternatives haven’t been well-received by state leaders. Incumbent Nikki Haley (R) has been criticized for refusing to reveal her “secret” plan to fix the state’s roadways, while challenger Vincent Sheheen would rely on anticipated revenue increases from the state’s general fund.

An analysis from Wyoming finds that the state’s 10-cent increase in the gas tax has not been entirely passed to consumers. The Casper Star-Tribune found that after the tax on gas and diesel was increased by 10 cents in 2013, the price of unleaded gasoline increased only 5 cents per gallon in 2014 while the price of diesel increased by 8 cents. Gov. Matt Mead (R), who signed the tax increase, has long argued that infrastructure investment is the conservative approach, since maintenance costs increase with less investment.

Transportation spending is a big issue in the Michigan governor’s race, with challenger Mark Schauer (D) calling out incumbent Rick Snyder (R) for his failure to convince state legislators to fix the states’ potholes and bridges. Snyder supports an increase in the state’s gas tax and wants to hike vehicle registration fees, while Schauer opposes an increase on the grounds that the governor has already raised taxes on ordinary Michiganders to pay for business tax cuts. Michigan’s gas tax is which is one of the nation’s highest at ten cents above the national average, but state road spending per driver is far below average. Meanwhile, the sale of tire and wheel insurance has skyrocketed across the state.

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