States weigh gas-tax hikes to fund overdue road work

Falling gas prices, decaying roads and bridges and a gridlocked Congress have states, even those run by Republicans, debating higher taxes.

States including Iowa, Michigan and New Jersey are considering higher levies at the pump, borrowing more or other money-generating maneuvers to improve infrastructure. Prices at the pump, which have fallen by more than $1 per gallon since April, may help ease opposition.

"The timing is right in light of the fact that fuel prices have dropped significantly," Iowa Gov. Terry Branstad, a Republican re-elected in November, said this month in Des Moines. "This is a difficult and challenging issue, but if we work together, I think we can get something done."

The American Society of Civil Engineers estimates that the U.S. requires $3.6 trillion in infrastructure investment by the decade's end. Congress hasn't raised the gas tax since 1993. Meanwhile, federal and state levies raise less as vehicle fuel efficiency has increased.

David Goldberg of the group Transportation for America, which advocates increased infrastructure funding, said representatives from 30 states attended the group's Denver conference last month exploring ways to raise funds. At least 10, he said, are considering action. Sean Slone at the Council of State Governments identified 20 states where higher taxes are possible.

To meet surface-transportation needs, $163 billion of investment is required annually for the next six years, said a Dec. 9 report by the American Association of State Highway and Transportation Officials and the American Public Transit Association.

States can increase gasoline taxes, seek other revenue or simply neglect their needs, said Richard Auxier, a research associate at the Tax Policy Center in Washington.

That was evident this year when Delaware Gov. Jack Markell, a Democrat, was unable to persuade his own party, which controls the legislature, to increase the fuel tax by 10 cents per gallon and borrow $250 million.

In states dominated by Republicans, the sell is still harder. Iowa has an estimated $215 million shortfall in annual transportation funding. Yet, during the past two years, measures that would raise the gasoline tax for the first time since 1989 went nowhere.

Pump prices have fallen since reaching this year's high of $3.696 on April 26. That may make voters more likely to accept higher taxes.

Republican elected officials, who generally oppose higher taxes, are seeing the link between spending on infrastructure and improving the economy, said Slone.

There has been "a realization among Republicans in the last few years how dire the situation has gotten … as far as the condition of the infrastructure, but also how important it is to invest," he said.

"The message from every corner of our state is clear," Snyder said. "It's time to fix the roads."

Thirty states have passed transportation-related fiscal initiatives during the past three years, according to the National Conference of State Legislatures. Yet even some of those still need more.

While Texas voters approved a ballot measure Nov. 4 to send about $1.7 billion in oil-and-gas tax revenue to highway work instead of a reserve fund, researchers say the state will be about $4 billion a year short of what's needed.