Across the Nation
Rhode Island Gas Tax Hike Echoes a National Struggle to Fix America’s Infrastructure
The Rhode Island gas tax is escalating on July 1, and it’s not the only state to increase this tax. Several others have determined that bumping up their gas tax rates can provide the needed funding for securing their weak infrastructure. This consumption tax ensures that everyone in the state, no matter their income, pays the same tax rate. While tax increases are a hard sell in most states, the fall of gas prices to an average of $2.64 per gallon in 2015 is helping leaders on both sides of the political sphere sell the gas tax hike.
Rhode Island’s Not Alone
Rhode Island certainly wasn’t the first to increase its gas tax. Leaders in Maryland, Massachusetts, Pennsylvania, Vermont, Virginia, and Wyoming all passed new laws to increase their states’ consumption taxes on gasoline in 2013. And Rhode Island wasn’t alone in its decision in 2014; leaders in New Hampshire also increased their tax on gas by four cents.
Eighteen other states are currently entertaining the idea of increasing the tax on gas or already have legislation in the works. Georgia is the first of these states to jump on the train in 2015—the state’s total price at the pump will increase to 26 cents per gallon on July 1.
The Federal Gas Tax
While neither the Obama Administration nor Congress has initiated an increase in the gas tax at a national level, it’s important to note that the federal government hasn’t increased the 18.4 cent per gallon tax in 22 years. Because of this, enough money isn’t being collected to cover more than two decades of inflation or technologies that have reduced gas consumption.
Nevertheless, there seems to be some support for an increase in the federal tax. Transportation planning officials in Akron, Ohio, for instance, support an increase of 10 cents per gallon. According to the Policy Committee of the Akron Metropolitan Area Transportation Study, the increase is essential for funding transportation projects across their state and the country as a whole. And the committee hasn’t left increasing the state’s own gas tax off the table, despite raising it to 28 cents per gallon in 2005.
States Desperate for Transportation Funds
It’s important to understand why states are scrambling to increase the gas tax. America’s transportation infrastructure is in trouble, and the funds traditionally used to improve it, namely those in the Highway Trust Fund, are almost gone. States are currently waiting on Congress to approve additional funds for transportation spending before May 31, when the latest short-term funding bill expires.
Since 2008, Congress has put $55 billion into the Highway Trust Fund, and a current proposal by the Obama Administration calls for $478 billion over six years. That might sound great, but it isn’t enough. According to the American Society for Civil Engineers, the 2013 Report Card for America’s Infrastructure gives the U.S. a D+, concluding that the country needs to invest $3.6 trillion by 2020 to repair and upgrade its infrastructure successfully.
This is where the Rhode Island gas tax comes into play and why it’s so important. With a little extra money in the pockets of taxpayers from their 2010 decrease of the top income tax rate to 5.99 percent, coupled with the lower gas prices nationally, this small state could see huge improvements to their infrastructure. With other states jumping on board, tax policies may start to revive the smooth roads of yesteryear.