Title: Motor Fuel Taxes | Urban Institute
Headings: Motor Fuel Taxes
Motor Fuel Taxes
How much revenue do state and local governments raise from motor fuel taxes?
How much do motor fuel tax rates differ across states?
Why are some states considering reforming their gas tax?
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Content: For most of the period, states did not respond to a flat or declining tax base with rate hikes, and as a result inflation-adjusted state and local motor fuel tax revenue was higher in 2007 ($45.8 billion) than it was in 2014 ($45.4 billion). States earmark most of their motor fuel tax revenue for transportation spending. And while gasoline consumption and thus tax revenue were not increasing, construction costs and demand for transportation project spending was. This left many states with transportation funding gaps. (In 2018, state and local motor fuel tax revenue accounted for 27 percent of highway and road spending. Toll facilities and other street construction and repair fees provided another 12 percent, and the remaining 61 percent came from other sources.) However, in recent years, most states made changes to their gas tax. Between 2013 to 2020, 31 states and the District of Columbia enacted legislation that increased their gas tax. States have various options when increasing transportation funding, including: Raise the gas tax rate.