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: By violating the users-pay/users-benefit principle, diversion poses both immediate and long-term threats to transportation funding. Diversions can leave roads and highways underfunded. The 10 states diverting the largest percentage of their gas tax money: New York diverts 37.5% of its gas tax revenue, Rhode Island diverts 37.1%, New Jersey and Michigan divert 33.9%, Maryland diverts 32.5%, Connecticut diverts 27%, Texas diverts 24%, Massachusetts diverts 23.9%, Florida diverts 13.6% and Vermont diverts 13.2%. This policy brief catalogs state gas tax diversions of the 25 states that employ that practice and outlines potential policies that will strengthen the users-pay/users-benefit model of transportation funding. State Gas Tax Diversion Rates
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Background
On February 25, 1919, Oregon introduced the first gas tax in the United States at a rate of one cent per gallon. The use of gas taxes to fairly fund roads and highways proliferated across the country, as gas usage correlated with vehicle road usage. Within the following decade, each of the then-48 states had adopted its own gas tax. In 1932, Congress created the first federal gas tax revenue source (one cent) intended to decrease the federal deficit; road and highway funding was traditionally under the purview of states and local governments.