States eye fuel tax shake-up at the pump

Fuel taxes are always changing.

In the past year alone, more than a dozen states changed their fuel tax rates. Some raised rates, while others lowered them.

Now, lawmakers in several states want even more changes.

Oregon

Oregon’s gas tax fight is heating up.

Last year, Gov. Tina Kotek signed a road funding deal that raised the gas tax by 6 cents. The hike was set to kick in Jan. 1.

Then voters stepped in.

A petition drive forced a pause on the increase until people can vote on it this fall. But changes to truck taxes in the same package are not affected by the public vote.

Now Democrats want to move the public vote up to May. Republicans say that’s a political move to dodge voter backlash during the fall election.

A Senate committee heard testimony this week on a bill to speed up the public vote.

More than 4,300 people have weighed in on the bill to speed up the vote. Fewer than 60 testified in support.

The bill is SB1599.

Oregonians are angry and frustrated. They cannot afford a $4.3B tax hike and they deserve to vote on it this November as stated on the petition sheet signed by 250,000 voters.

It’s time for politicians in Salem to listen.

Join the 99% of Oregonians who oppose SB 1599 by… pic.twitter.com/uIHTtQbyvT

— Christine Drazan (@ChristineDrazan) February 10, 2026

Pennsylvania

Pennsylvania’s fuel taxes are on autopilot.

State law allows fuel taxes to adjust automatically every January.

Right now, the gas tax is 57.6 cents per gallon. Diesel sits at 74.1 cents.

Rep. Joe D’Orsie, R-Mount Wolf, wants to stop the automatic tax changes. His bill, HB2144, would force lawmakers to vote on tax rate changes.

“In a time of crippling stagflation, the last thing Pennsylvanians need as they fill up their tanks is a ‘new’ tax automatically added to their essential purchase, without having a say or their voice in Harrisburg being able to vote on such a measure,” D’Orsie said.

The bill is in the House Transportation Committee.

Arizona

Arizona lawmakers want to give some drivers a break in parts of the Phoenix area.

The state charges 18 cents per gallon on gas. The diesel rate is 26 cents.

A new bill would pause those taxes from May through October in Maricopa County and parts of Pinal County.

Rep. Julie Willoughby, R-Chandler, said the fuel tax holiday would help offset federal air-quality requirements for using a special fuel blend during the warmer months.

“Because of federal requirements, families in Maricopa and Pinal counties are forced to pay more at the pump than the rest of Arizona,” Willoughby said.

She noted that in 2023, Phoenix drivers paid higher fuel prices than those in Los Angeles.

“As California refineries shut down, supply constraints will increase – pushing prices higher at a time when families are struggling with rising costs,” she said.

The bill, HB2400, would shift $72.6 million a year from highway funds to cover the tax break.

Willoughby said the fuel tax bill is about fairness.

“I understand that this is not the best option, but being mandated on a special fuel that we don’t know is truly doing what it’s supposed to be doing, is also not fair to the constituents,” she said.

The House Natural Resources, Energy and Water Committee voted to advance the bill. It awaits further consideration in the House.

Kentucky

Kentucky may be heading in the other direction.

The state now collects 25 cents per gallon on gasoline and 22 cents on diesel. Rates rise and fall with fuel prices.

Last year, taxes dropped slightly.

Rep. Tom Smith, R-Corbin, said the current tax structure is causing the state to lose ground in the road funding fight. As a result, he is backing a bill that would change the fuel tax formula.

HB370 would set the base fuel tax at 29.6 cents for gas and diesel. A second change would take effect in 2027. At that time, rates would increase to 34.6 cents.

After that, rates would rise with inflation – automatically.

The bill also raises vehicle fees.

HB370 is in the House Transportation Committee. LL