Bond Buyer 2/16/16 1:55pm ET By Jim Watts
DALLAS – Lawmakers in 23 states are looking at proposals to increase funding for local transportation projects, including new debt, reallocation of existing revenues, and gasoline tax increases, according to the latest report from a transportation group.
The Transportation Investment Advocacy Center report said 44 bills to increase transportation funding have been proposed so far in 2016 legislative sessions, with two state initiatives already set for the November ballot.
Increases in the gasoline tax have been proposed in eight states — Alaska, Hawaii, Indiana, Minnesota, Missouri, New Mexico, South Carolina, and Vermont — while Kentucky, New Hampshire, and Tennessee are considering either increasing their existing fees on electric and alternatively-fueled vehicles or adding a new tax, said Stephanie Kramer, director of the center, which is sponsored by the American Road & Transportation Builders Association.
Proposed legislation in the Minnesota Senate would levy a 6.5% sales tax on motor fuel in addition to the state’s 28.5 cent per gallon gasoline tax, to generate $580 million per year. The proposal puts a floor on the sales tax so that it would not provide less than 10 cents per gallon.
The Minnesota proposal, Senate File 87, also includes $800 million of highway bonds, to be issued over four years for projects in the state’s Corridors of Commerce program, $200 million of highway bonds to be issued over four years for transportation economic development, and $567 million of state general obligation bonds for local road and bridge projects.
The Senate proposal would generate an additional $1.1 billion for transportation in 2017 and $1.13 billion by 2019, according to its sponsors.
Alaska Gov. Bill Walker has asked lawmakers to double the state’s gasoline tax, to 16 cents per gallon from the current 8 cents, to generate up to $49 million per year of additional revenue.
Jerry Burnett, deputy commissioner of the Alaska Department of Revenue, told the state House Transportation Committee last week that the increase would add about $80 per year to the gasoline taxes paid by the average motorist.
“Since it’s a per-gallon tax and the price has varied so tremendously over the past few years … if you put 8 cents extra on a gallon of fuel today you’re still way cheaper than you were two years ago,” Burnett said.
In Hawaii, a House bill would replace the state’s gasoline tax of 17 cents per gallon with a sales tax on the wholesale price of fuel while Gov. David Inge has proposed raising the gasoline tax to 20 cents per gallon. State taxes on a gallon of gasoline in Hawaii currently add up to 42.3 cents per gallon.
The Indiana House passed a Republican-sponsored transportation proposal earlier this month that would increase the state’s gasoline tax by 4 cents from the current 18 cents per gallon, raise the diesel tax by 7 cents from the current 16 cents per gallon, and index both to inflation.
Meanwhile, the Indiana Senate has adopted the five-year, $1.4 billion “21st Century Crossroads” proposal of Republican Gov. Mike Pence that relies on $240 million of new highway bonds but no new taxes.
New Jersey voters will decide in November on a constitutional amendment that would dedicate all motor fuel tax revenues and gross receipt taxes on petroleum products to fund road and bridge projects. The amendment would also dedicate to transportation all future revenues from increases in the state’s 14.5 cents per gallon tax on gasoline and diesel.
Nevada’s November ballot will include an amendment that would allow cities and counties to link their local gasoline tax to inflation.