JULY 2015

THE COUNCIL OF STATE GOVERNMENTS

CAPITOL RESEARCH
TRANSPORTATION POLICY

State Gas Tax Increases, 2015

Six states raised gas taxes during the first
half of 2015.
Iowa lawmakers passed and Gov. Terry Branstad
signed a measure, SF 257, that increased fuel taxes
by 10 cents per gallon and increased permit fees.1
Those actions are expected to raise $215 million
annually for city, county and state roads.2
South Dakota legislators passed and Gov. Dennis
Daugaard signed legislation, SB 1, that increased
motor fuel taxes from 22 cents per gallon to 28
cents. They also increased the vehicle sales tax by
one percent, expanded the authority of counties
and townships to allow voters to consider local
option property taxes for road and bridge repair
and construction, and increased optional county
vehicle registration fees.3
Utahs gas tax will increase beginning Jan. 1,
2016, from 24.5 cents per gallon to a 12 percent
assessed rate with a floor on the gas tax rate 5
cents per gallon higher than its current level and
able to increase up to an assessed tax of 40 cents
per gallon. The tax rate on diesel, natural gas and
hydrogen will increase incrementally to 16.5 cents
by July 1, 2018. The states gas tax legislation, HB
362, also empowers counties to increase a quartercent local sales tax to fund local roads, transit, bike
or pedestrian infrastructure, or other transportation projects.4 State transportation revenues in
Utah are expected to increase by $76 million by
the 2017 fiscal year as a result of the legislation.5
Idaho lawmakers passed and Gov. Butch Otter
signed legislation, HB 312, which raised the gas tax
by 7 cents, increased annual registration fees and
imposed fees for hybrids and electric cars. Some
general fund dollars also are diverted to statewide
roads projects in the legislation.6 The measure is
expected to increase transportation revenues by
$94 million annually.7
Georgia lawmakers passed and Gov. Nathan Deal
signed a measure, HB 170, that increased fuel
excise taxes by 6.7 cents per gallon to 26 cents per
gallon for gasoline and 29 cents for diesel. The
legislation indexed the tax rates to average vehicle
fleet efficiency and the consumer price index. The
The Council of State Governments

measure also exempted fuel from the sales tax,

except for 1 percent imposed by counties, and
imposed new registration fees for electric vehicles,
heavy vehicle registration fees and a $5 per night
hotel-motel fee, the proceeds from which will go
to transportation purposes. In addition, lawmakers
gave counties and groups of counties the authority to have voters approve transportation purpose
local option sales taxes up to 1 percent for a
limited time.8 The package is expected to increase
revenues by $870 million for the 2016 fiscal year
and $1.2 billion by 2020, with a five-year average of
$1.07 billion.9
Nebraska lawmakers overrode the veto of Gov.
Pete Ricketts to approve legislation, Legislative
Bill 610, that raised the per gallon gas tax by 6
cents over four years to a total of 31.6 cents per
gallon. The phase-in will begin with a 1.5 cents per
gallon increase Jan. 1, 2016.10 Once fully implemented, the increase is expected to generate $25
million more annually for the state and $51 million
for cities and counties.11

Several states changed their gas taxes

to make them more sustainable or to
maintain revenue levels.
Kentuckys General Assembly prevented a $292
million cut in transportation revenue by passing legislation, HB 299, to raise the floor on the
assessed wholesale fuel price, setting the minimum
tax to 24.6 cents per gallon. Due to falling gas
prices, the 27.5 cents per gallon rate this spring
had been expected to fall to 22 cents per gallon
on April 1, when an automatic adjustment was
scheduled to be made.12
North Carolinas legislature passed a bill, SB 20,
that reduced the gas tax from 37.5 cents to 34
cents per gallon by the end of 2016. However,
due to a drop in fuel prices, it ultimately will
amount to a higher tax than it otherwise would
have thanks to changes in the way the tax rate is
calculated. Starting in January 2017, the gas tax will
be automatically adjusted based on two factors:
population increases (75 percent) and changes in
the Consumer Price Index (25 percent). The state
will see a $13.5 million reduction in transportation
revenues in the short term but eventually a $400
million revenue gain from the changes.13
Georgias legislation is notable for not only
raising the gas tax but also providing for annual
adjustments based on both inflation and fuel
efficiency, which should help to make the tax more
sustainable over time. The legislation also seeks
to diversify the transportation revenue stream to
some degree, with new registration fees and the
hotel-motel fee.14
Sean Slone, Director of Transportation & Infrastructure Policy,
sslone@csg.org
REFERENCES
1 Iowa Legislature. Senate File 257. Accessed from: http://coolice.legis.iowa.gov/Cool-ICE/default.asp?Category=billinfo&Service=Billbook&frame=1&GA=86&hbill=SF257
2 William Petroski. Gas tax hike takes effect Sunday. The Des Moines Register. February 25, 2015. Accessed from:
http://www.desmoinesregister.com/story/news/politics/2015/02/25/iowa-gas-tax-branstad/23990671/
3 South Dakota Legislature. Senate Bill 1. Accessed from: http://legis.sd.gov/docs/legsession/2015/Bills/SB1ENR.pdf
4 Utah State Legislature. House Bill 362. Accessed from: http://le.utah.gov/~2015/bills/static/HB0362.html
5 Katie McKellar. Utah taxpayers will pay millions more in wake of 2015 Legislative session. Deseret News. March 28, 2015. Accessed from:
http://www.deseretnews.com/article/865625243/Utah-taxpayers-will-pay-millions-more-in-wake-of-2015-Legislative-session.html?pg=all
6 Idaho Legislature. House Bill 312. Accessed from: http://www.legislature.idaho.gov/legislation/2015/H0312.htm
7 Betsy Z. Russell. Idaho Senate approves gas tax increase. The Spokesman-Review. April 8, 2015. Accessed from: http://www.spokesman.com/stories/2015/apr/08/idaho-senate-approves-gas-tax-increase/
8 Georgia General Assembly. House Bill 170. Accessed from: http://www.legis.ga.gov/Legislation/en-US/display/20152016/HB/170
9 Greg Bluestein. What you need to know about Georgias new transportation bill. The Atlanta Journal-Constitution. May 4, 2015. Accessed from:
http://politics.blog.ajc.com/2015/05/04/what-you-should-know-about-georgias-new-transportation-bill/
10 Legislature of Nebraska. Legislative Bill 610. Accessed from: http://nebraskalegislature.gov/FloorDocs/104/PDF/Final/LB610.pdf
11 Jeff Duggan. In a defeat for Gov. Ricketts, Nebraskas gas tax will be going up. Omaha World Herald. May 15, 2015. Accessed from:
http://www.omaha.com/news/legislature/in-a-defeat-for-gov-ricketts-nebraska-s-gas-tax/article_fee7547a-fa73-11e4-9214-97066e91f6f9.html
12 Kentucky Legislature. House Bill 299. Accessed from: http://www.lrc.ky.gov/record/15RS/hb299.htm
13 General Assembly of North Carolina. Senate Bill 20. Accessed from: http://www.ncleg.net/Applications/BillLookUp/LoadBillDocument.aspx?SessionCode=2015&DocNum=2292&SeqNum=0
14 Georgia General Assembly.

THE COUNCIL OF STATE GOVERNMENTS

STATE GAS TAX INCREASES APPROVED JAN.-JUN. 2015

Estimated Annual
Transportation
Revenue Shortfall

Date
Enacted

$3 billion to $4
billion1

5/4/15

7/1/15

Idaho

$262 million2

4/21/15

Iowa

$215 million3

Nebraska

South
Dakota

State

Georgia

Utah

Previous or
Effective Date Current Gas Tax
Rate

Amount
of Gas Tax
Increase

Projected Revenue Increase

19 cents per
gallon

6.7 cents

$1.07 billion annually (fiveyear average)

7/1/15

25 cents per
gallon

7 cents

$94 million annually

2/25/15

3/1/15

21 cents per
gallon

10 cents

$215 million annually

$53 million4

5/14/15

1/1/16 (first
1.5 cent
increment)

25.6 cents per

gallon

6 cents

$76.2 million annually

(combined state & city/
county funding)

$460 million5

3/17/15

4/1/15

22 cents per
gallon

6 cents

$80 million annually

$11.3 billion (over

next 30 years)6

3/27/15

1/1/16

24.5 cents per

gallon

5 cents

$76 million annually (by FY

2017)

SOURCES
1 Andria Simmons. New transportation bill wont put you in the fast lane. The Atlanta Journal Constitution. April 6, 2015. Accessed from:
http://www.ajc.com/news/news/state-regional-govt-politics/new-transportation-bill-wont-put-you-in-the-fast-l/nkmjp/
2 Carolyn Kramer. Idaho Becomes Fourth State to Increase Gas Tax. Washington Newsline. April 24, 2015. Accessed from:
http://www.artba.org/newsline/2015/04/24/idaho-becomes-fourth-state-to-increase-gas-tax/
3 Tim Anderson. Down the funding road again: In states such as Iowa, Michigan and South Dakota, legislators appear closer to finding solutions to transportation shortfalls. Stateline Midwest. January 2015.
Accessed from: http://www.csgmidwest.org/policyresearch/0115-transportation-funding.aspx
4 Henry J. Cordes. Debate on raising Nebrakas gas tax boils down to shortfall vs. windfall. Omaha World Herald. May 4. 2015. Accessed from:
http://www.omaha.com/news/metro/debate-on-raising-nebraska-s-gas-tax-boils-down-to/article_0fb2b61d-99d3-5b3d-89d4-e0ea1db18733.html
5 South Dakota Lawmakers Approve Transportation Funding Proposal. Washington Newsline. November 17, 2014. Accessed from:
http://www.artba.org/newsline/2014/11/17/south-dakota-lawmakers-approve-transportation-funding-proposal/
6 Fueling Our Future 2013-2040: Policy Options to Address Utahs Future Transportation Needs. Utah Foundation. March 2013. Accessed from: http://www.utahfoundation.org/uploads/rr713.pdf

THE COUNCIL OF STATE GOVERNMENTS