Gas Taxes May Go Up Around The Country As States Seek To Plug Budget Holes This year could see a wave of state tax hikes on gasoline and diesel. Oklahoma is one of about a dozen states seriously considering increases.
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Gas Taxes May Go Up Around The Country As States Seek To Plug Budget Holes

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Gas Taxes May Go Up Around The Country As States Seek To Plug Budget Holes

Gas Taxes May Go Up Around The Country As States Seek To Plug Budget Holes

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STEVE INSKEEP, HOST:

This year, more than two dozen states are expected to consider increasing taxes on gasoline and diesel fuel. Those two dozen states include some more conservative places where any talk of higher taxes would normally provoke a backlash. Here's Joe Wertz from StateImpact Oklahoma.

JOE WERTZ, BYLINE: Here's how long it's been since Oklahoma lawmakers increased taxes on gasoline and diesel...

(SOUNDBITE OF SONG, "LIVIN' ON A PRAYER")

BON JOVI: (Singing) We'll give it a shot. Oh, we're halfway there.

WERTZ: ...1987. Bon Jovi was setting fire to the charts, and Oklahoma lawmakers were scrambling. The state's energy-fueled economy was shaken by low oil prices and dwindling revenue streams to fund state government. Today, the tune at the state capitol is the same. Finance officials say the state is facing a $900 million budget hole. Taxes at the pump are an easy target.

CARL DAVIS: The state has one of the oldest gas-tax rates in the country.

WERTZ: Carl Davis is research director at the Institute on Taxation and Economic Policy. Over the decades, the value of that unchanged tax rate, 16 cents per gallon of gasoline and a little less for diesel, has eroded with inflation. Davis says more fuel-efficient cars and trucks have also taken a bite.

DAVIS: It's just the math just doesn't work. To levy the same gas-tax rate for 30 years - it just loses purchasing power.

WERTZ: And Oklahoma is not the only state with budget problems considering hiking motor-fuel taxes. Davis says about a dozen states are looking at increases, a list that includes Republican strongholds like Alaska, Louisiana, Mississippi and Indiana.

(APPLAUSE)

WERTZ: Here's Governor Eric Holcomb at his recent State of the State address.

(SOUNDBITE OF ARCHIVED RECORDING)

ERIC HOLCOMB: The fact is existing sources of revenue are just not keeping up.

WERTZ: Why would so many conservative politicians support tax increases? Davis says one reason is that motor-fuel taxes pay for popular projects like this.

(SOUNDBITE OF TRAFFIC)

RICK LOWRY: What we're working on today - we're just chipping the bridge. We're getting loose concrete and stuff off our bridge.

WERTZ: Rick Lowry is supervising a crew of men armed with a scissor lift and shovels. They're under a bridge, battling three of the Department of Transportation's biggest enemies, salt, sand and water.

(SOUNDBITE OF SHOVELING)

LOWRY: You know, it could fall off the bridge, straight through a car window or something. And that's the thing we're more concerned about than anything.

WERTZ: Motor-fuel taxes are a relatively small revenue stream in Oklahoma. But here and in most other states, the money pays for roads and highways and transportation, things Davis says have bipartisan and public support.

DAVIS: There's really no such thing as a Republican pothole or a Democrat bridge. It's an issue that brings the parties together.

WERTZ: Davis says conservative states support motor-fuel taxes because it's the user who pays them. He warns gasoline and diesel taxes are regressive. They affect low-income people more than those with higher incomes. But in recent years, gas prices have been pretty low. And unlike other taxes, Davis says the business community often supports increasing them.

DAVIS: At some point, it's just not worth refusing choosing to pay a few more pennies per gallon if the cost is going to be having to hit a pothole and get your vehicle realigned or wasting time and money stuck in traffic.

WERTZ: Any tax increase proposed by Oklahoma lawmakers will need a legislative supermajority, a tall order even with a $900 billion budget gap. But there's another reason why motor-fuel tax hikes might fly in 2017. It's not an election year. For NPR News, I'm Joe Wertz in Oklahoma City.

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