Title: How Much Gas Tax Money States Divert Away From Roads - Reason Foundation
Headings: How Much Gas Tax Money States Divert Away From Roads
Policy Brief
How Much Gas Tax Money States Divert Away From Roads
Examining the percentage of state gas tax revenue that is allocated for expenses unrelated to roads, including money shifted to law enforcement, education, tourism, environmental programs and more.
State Gas Tax Diversion Rates
Background
Figure 1: State Gas Tax Rates 2000-2019
Gas Tax Diversions by State
Figure 2: State Gas Tax Diversion Rates
Figure 3: Average Diversion Rate of Each U.S. Region
Methodology
Colorado
Connecticut
Florida
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
New Jersey (FY18)
New York
North Carolina
North Dakota
Oklahoma
Pennsylvania
Rhode Island
South Carolina
South Dakota
Texas
Utah
Vermont
Virginia
Washington
Wisconsin
Analysis
Recommendations

Content: How Much Gas Tax Money States Divert Away From Roads - Reason Foundation
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Reason Foundation
Topics › Transportation › Highways, Toll Roads
Policy Brief
How Much Gas Tax Money States Divert Away From Roads
Examining the percentage of state gas tax revenue that is allocated for expenses unrelated to roads, including money shifted to law enforcement, education, tourism, environmental programs and more. By Baruch Feigenbaum and Joe Hillman
June 30, 2020
Oregon introduced the first gas tax in 1919 and within a decade each state adopted the motor fuel tax as a method of funding roads. Gas taxes used to fund roads and highways represent the users-pay/users-benefit principle of responsible taxation, whereby those bearing the cost of the tax—highway users—obtain the benefits of a well-maintained road network. Many states today, however, divert portions of their state gas tax revenue to the state general fund and other non-highway uses, such as these: The largest and most common diversions, found in 20 states, are those to transit and active transportation (pedestrian and bicycle projects). New York and New Jersey, for example, allocate over a third of their respective motor fuel tax (MFT) revenue to transit. Ten states divert a portion of their gas tax revenue to law enforcement and safety services, marking the second most common diversion. Though less frequent, diversions to education tend to be substantial, accounting for 25.9% and 24.7% of gas tax revenue in Michigan and Texas respectively. Other states divert gas tax revenue to tourism, environmental programs and administrative costs. In total, 22 states divert over 1% of their gas tax revenue.