M II A II R II K
Dec 15, 2011, 7:24 PM
Stagnant State Gas Taxes Costing States $10 Billion Each Year, Undermining Commerce and Forcing Raids on General Funds
Dec. 14, 2011
Read More: http://www.cbsatlanta.com/story/16321613/new-report-stagnant-state-gas-taxes-costing-states-10-billion-each-year-undermining-com
PDF Report: http://www.itepnet.org/bettergastax/bettergastax.pdf
A first of its kind, 50-state analysis from the Institute on Taxation and Economic Policy (ITEP) reveals that state governments are losing out on over $10 billion in transportation revenue each year, contributing to an estimated $130 billion drain on the economy resulting from higher vehicle repair costs and travel time delays. State lawmakers reluctant to update gas taxes have cost their states, on average, $201 million in annual revenues. These losses are exacerbated by the declining federal gas tax, which also supports state transportation projects and has lost 41 percent of its value since it was last raised in 1993. "Building a Better Gas Tax: How to Fix One of State Government's Least Sustainable Revenue Sources" documents state-by-state figures including the costs and benefits of proposed remedies.
- Annual revenues individual states stand to recoup by updating their gas tax rates to match current transportation construction costs include: Virginia – $578 million; Maryland – $509 million; New Jersey – $505 million; Massachusetts – $451 million; Iowa – $337 million; Oklahoma – $338 million; South Carolina – $407 million; Arizona – $435 million. "Building a Better Gas Tax" shows that the average state has not increased its gas tax rate in over a decade, and 14 states have gone 20 years or longer without an increase. But while state gas taxes remain flat, the cost of paving roads and building bridges inevitably rises, often at a rate higher than general inflation. "It's basic math," said Davis. "The road repairs you could buy in 1990 with 20 cents, for example, are going to cost 34 cents today. But we still see some states collecting the same flat 20 cent tax that they did back in 1990. That's the definition of unsustainable." After adjusting for construction cost growth, the average state's gasoline tax rate has effectively fallen by 20 percent, or 6.8 cents per gallon, since the last time it was raised. Diesel taxes have fallen by 18 percent, or 6.0 cents per gallon.
"Building a Better Gas Tax" offers three specific policy recommendations for modernizing state gas taxes and indicates which states have implemented which. They are:
• Increase gas tax rates to reverse their long term declines; the appropriate rate varies by state.
• Peg gas tax to grow alongside the cost of transportation construction projects.
• Create or enhance targeted tax credits for low-income families to offset the impact of gas tax reform.
.....
Dec. 14, 2011
Read More: http://www.cbsatlanta.com/story/16321613/new-report-stagnant-state-gas-taxes-costing-states-10-billion-each-year-undermining-com
PDF Report: http://www.itepnet.org/bettergastax/bettergastax.pdf
A first of its kind, 50-state analysis from the Institute on Taxation and Economic Policy (ITEP) reveals that state governments are losing out on over $10 billion in transportation revenue each year, contributing to an estimated $130 billion drain on the economy resulting from higher vehicle repair costs and travel time delays. State lawmakers reluctant to update gas taxes have cost their states, on average, $201 million in annual revenues. These losses are exacerbated by the declining federal gas tax, which also supports state transportation projects and has lost 41 percent of its value since it was last raised in 1993. "Building a Better Gas Tax: How to Fix One of State Government's Least Sustainable Revenue Sources" documents state-by-state figures including the costs and benefits of proposed remedies.
- Annual revenues individual states stand to recoup by updating their gas tax rates to match current transportation construction costs include: Virginia – $578 million; Maryland – $509 million; New Jersey – $505 million; Massachusetts – $451 million; Iowa – $337 million; Oklahoma – $338 million; South Carolina – $407 million; Arizona – $435 million. "Building a Better Gas Tax" shows that the average state has not increased its gas tax rate in over a decade, and 14 states have gone 20 years or longer without an increase. But while state gas taxes remain flat, the cost of paving roads and building bridges inevitably rises, often at a rate higher than general inflation. "It's basic math," said Davis. "The road repairs you could buy in 1990 with 20 cents, for example, are going to cost 34 cents today. But we still see some states collecting the same flat 20 cent tax that they did back in 1990. That's the definition of unsustainable." After adjusting for construction cost growth, the average state's gasoline tax rate has effectively fallen by 20 percent, or 6.8 cents per gallon, since the last time it was raised. Diesel taxes have fallen by 18 percent, or 6.0 cents per gallon.
"Building a Better Gas Tax" offers three specific policy recommendations for modernizing state gas taxes and indicates which states have implemented which. They are:
• Increase gas tax rates to reverse their long term declines; the appropriate rate varies by state.
• Peg gas tax to grow alongside the cost of transportation construction projects.
• Create or enhance targeted tax credits for low-income families to offset the impact of gas tax reform.
.....
