Progress continues at statehouses around the nation to raise road revenue. Collecting more fuel tax is a popular option among legislators.
So far this year, 18 transportation-funding measures have been adopted across the country. The American Road and Transportation Builders Association reports the new revenue approved totals more than $7 billion.
Washington
Washington Gov. Bob Ferguson has signed into law legislation to raise $3.2 billion over six years through a mix of new and adjusted revenue sources.
Previously SB5801, the new law will help to provide revenue to maintain and improve the state’s roads, bridges, ferries and transit systems.
The most notable change coming to the Evergreen State is a 6-cent increase in the fuel excise tax. The gas and diesel rates will increase on July 1.
The gas tax will increase by 6 cents from 49.4 cents to 55.4 cents. The diesel tax will increase by 3 cents on July 1 and again in July 2027 to reach 55.4 cents.
An inflationary adjustment is included. The inflation-based increase for gas takes effect in 2026. The adjustment for diesel starts in 2028.
“The people of Washington expect us to invest in those projects, but we have limited revenue options right now,” Ferguson said at the bill signing. “The gas tax, unfortunately, is one of them.”
Local governments will get 5% of the new fuel tax revenue.
Many motorists and truck drivers will soon also be responsible for paying new and higher vehicle fees to bolster transportation funding.
Mississippi
The state of Mississippi will soon also collect more fuel tax revenue.
Starting July 1, the state’s 18-cent excise tax on fuel purchases will begin to increase.
The tax rate increase is part of a massive tax overhaul bill signed into law by Gov. Tate Reeves.
Previously HB1, the new law will increase the tax on gas and diesel by nine cents per gallon over multiple years.
A 3-cent rate increase is set for the first of next month. Additional increases will be implemented each July through 2027. At that time, the fuel tax rate will reach 27 cents.
The Mississippi Department of Transportation will receive the bulk of the additional fuel tax revenue – 74%. The State Aid Road Fund will get 23.25% of tax revenue with the state’s multi-modal fund getting the rest.
The new law also includes a provision to adjust the fuel tax rates every other year based on the percentage change in the yearly average of the National Highway Construction Cost Index. The adjustments will begin in 2029. The maximum increase at one time could be one penny.
Ohio
Ohio Gov. Mike DeWine acted earlier this spring to enact the state’s two-year, $11 billion transportation budget. It does not include any fuel tax increases.
For fiscal years 2026 and 2027, $8 billion is allotted for statewide highway construction. Nearly $400 million will be used for new highway construction.
The budget includes other transportation-related provisions. One notable provision is $150 million to study and construct truck parking on state-owned land throughout the state.
The governor’s office said from 2015 to 2019, more than 460 truck crashes in Ohio were due to fatigued driving. The incidents resulted in six deaths. Additionally, five people were killed in crashes involving trucks illegally parked on roadway shoulders over the same period.
The new budget takes effect July 1.
Michigan
In Michigan, House lawmakers approved a $3.1 billion, nine-bill transportation-funding package that includes language to eliminate the sales tax collected on fuel purchases.
Truck drivers and motorists fueling in the state pay a 31-cent state excise tax. Tax rates are adjusted each January.
There is also a 6% state sales tax on every gallon of fuel sold. Much of the sales tax revenue is diverted away from transportation for other purposes.
The Republican-led bill package would replace the sales tax with an equivalent increase in the fuel tax. The distinction would enable the state to apply all fuel tax revenue for transportation purposes.
Another change would increase the fuel tax rate starting Oct. 1. At that time, the gas and diesel rates would increase to 51 cents.
Additionally, the taxes would be adjusted for inflation on Jan. 1, 2026, but the adjustment increment would be based on the average of the tax rates in effect during 2025.
The bill package has received initial consideration in the Senate Appropriations Committee.
Minnesota
Minnesota state lawmakers are in park when it comes to working through a transportation-spending plan.
The regular session ended May 19 without a budget deal to address road, bridge and transit funding needs.
Prior to the end of the session, House and Senate lawmakers approved differing plans to cover transportation spending for the next two years. Neither plan includes a fuel tax increase.
House lawmakers approved a plan to put more money into roads and bridges and less into transit.
The House version of HF2438 would allot $3.26 billion for state roads. Local roads would receive another $1.4 billion.
Senate lawmakers approved a budget proposal that preserves full funding for transit throughout the state and an increase for state road construction and maintenance.
The state is required to approve a balanced budget in odd-numbered years. If the legislature and governor fail to do so by July 1, a state government shutdown would result.
A special session to address budget issues that include transportation could occur as early as this week. As of Monday, June 2, Gov. Tim Walz had not yet announced when he will have legislators return to the statehouse to get a deal done.
Oregon
Oregon state lawmakers are also struggling to reach consensus on a transportation-funding deal.
Democratic lawmakers previously made public a transportation budget framework. Their plan would raise more than $1.9 billion every two years in new taxes and fees.
House Republicans followed up with their own proposal to get transportation work done without any new taxes or fees.
The two sides are tasked with coming to an agreement on the issue before the end of the regular session later this month.
The budget framework includes an increase to the state’s 40-cent gas tax rate. A 20-cent increase would be phased in over six years.
An 8-cent increase would take effect in January. Three additional 4-cent increases would be implemented every two years until 2032. At that time, the tax rate would reach 60 cents.
After the gas tax increase was fully implemented, the rate would be indexed to inflation. The weight-mile tax would also increase by 16.9%.
A proposal introduced by House Republicans to address transportation-funding needs does not include fuel tax or other fee increases.
The minority party’s plan is touted to prioritize core functions of the Oregon DOT and sideline “non-essential programs and divisive agendas” while protecting federal transportation funding and preserving critical road safety services. LL
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