Title: States, Not Just Feds, Struggle to Keep Gas Tax Revenue Flowing
Headings: States, Not Just Feds, Struggle to Keep Gas Tax Revenue Flowing
States, Not Just Feds, Struggle to Keep Gas Tax Revenue Flowing
According to a Governing analysis, two-thirds of states' fuel taxes have failed to keep up with inflation, forcing lawmakers to revisit the politically fraught issue of raising taxes.
State revenues are keeping up with inflation more than federal revenues
Fuel taxes can keep up with inflation
But revenues are not always a function of policy
Inflation matters
The gas tax is not the only way to pay for roads
State Motor Fuel Tax Data
Select State:
Alabama
Inflation-adjusted change since 1994: -$176,777,000 (-24.9%)
Inflation-adjusted change since 2000: -$160,360,000 (-23.1%)
Years since raising gas tax: 22.7 years as of February

Content: Many states use sources other than gas taxes to pay for their transportation projects, and several use fuel tax revenues to cover non-transportation costs. But looking at the revenues each state receives can illustrate the benefits and drawbacks of motor fuel taxes. State revenues are keeping up with inflation more than federal revenues
Both state and federal fuel tax revenues are declining, but states are doing better. In the federal fiscal years of 1999 through 2013 -- the last for which IRS data for both gasoline and diesel fuel taxes are available -- federal revenues dropped 18 percent. During the same period, state fuel tax revenues dropped just 7 percent. The biggest reason for the better state performance was the fact that California overhauled its transportation funding system in 2011, so that it is more reliant on gas taxes. California accounted for more than two-thirds of the change in revenue in that period. But other factors are at work, too. Joseph Henchman of the conservative Tax Foundation said it's easier to convince officials to raise gas taxes at the state level, because policymakers spend that money locally. The federal government spends most of its gas tax money by divvying it up among states.