States take lead on gas tax hikes

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Gas tax increases in several states are taking effect ahead of the holiday weekend as Congress struggles to raise the tax nationally or find another way to cover transportation funding. 

New Hampshire, Maryland and Indiana all implemented increases in their state gas taxes on July 1, according to reports. 

New Hampshire’s levy went up four cents-per-gallon and Maryland’s increased by a half of a penny per gallon. Indiana, meanwhile, switched from a flat rate to a percentage of the monthly gasoline price average in the state. 

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The movement in the state gas taxes comes as congressional debate about transportation funding has largely stalled

Infrastructure advocates have pushed lawmakers to increase the federal gas tax for the first time in 21 years as the Department of Transportation said this week that it would soon begin cutting back on infrastructure reimbursements to states.  

The gas tax, which is currently priced at 18.4 cents-per-gallon, has been the traditional source of funding for the Highway Trust Fund, which is set to run out of money in August. The gas tax only brings in approximately $34 billion per year, however, and current transportation funding is closer to $50 billion a year.

Lawmakers are struggling to come up with a way to close the approximately $16 billion-per-year shortfall before the Highway Trust Fund goes bankrupt. 

A bipartisan pair of senators proposed last month that the tax be increased by 12 cents over the next two years to help make up the transportation funding difference. 

But lawmakers in both chambers have largely been reluctant to increase taxes in the middle of an election year. 

Transportation advocates have pointed to states that have increased their gas taxes to argue that a federal hike would be more politically viable than most observers believe.