Dem gov backs gas tax increase

Dem gov backs gas tax increase
© Greg Nash

Missouri Gov. Jay Nixon (D) is backing a proposal to increase his state’s 17.3 cents per gallon gas tax by 1.5 cents to help pay for transportation projects, The Associated Press reports

The new Missouri fuel levy would be collected on top of an 18.4 cents per gallon federal gas tax that fills the federal government’s transportation funding coffers. 

The American Petroleum Institute says the increase will bring the total taxes that drivers in Missouri are charged at the pump to about 37 cents per gallon.  

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Nixon said at press conference on Tuesday that he is supporting a bill in the  Missouri Legislature to increase the state's tax on gas by 1.5 cents and diesel by 3.5 cents, according to the report. 

Missouri is the latest state to move to increase its own gas taxes in recent years as Congress has resisted hiking the federal tax. Six states implemented such hikes on July 1 of last year. 

Transportation advocates had pushed lawmakers to increase the federal gas tax during a debate about a multiyear highway funding bill last year, but lawmakers adopted instead to turn to other areas of federal budget to pay for a five-year, $305 billion highway bill instead of asking drivers to pay more at the pump. 

Supporters of increasing the gas tax pointing to the willingness of states like Missouri to raise their own fuel levies as evidence that a national hike would be politically palatable this year.

Conservative groups in Washington have made clear that they would consider a federal increase to be a tax hike, however, and Republican lawmakers ruled it out even as they were searching for ways to pay for a new highway bill.

The national gas tax has been the traditional source of transportation funding since its inception in the 1930s. The tax has not been increased since 1993, however, and improved fuel efficiency has sapped its purchasing power. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually at its current rate. 

Lawmakers turned to other areas of the federal budgets to close the $16 billion per year gap last year, but transportation advocates have said the federal gas tax will have to eventually be increased or replaced with a more sustainable funding source to keep pace with rising costs for infrastructure projects. 

The Congressional Budget Office (CBO) has projected that it will take about $100 billion, in addition to the annual gas tax receipts, to pay for a six-year transportation funding bill. 

The recently completely highway bill lasts for five years.