Dive Brief:
- On July 1, Indiana, Montana, New Jersey, South Carolina, Tennessee and West Virginia all saw a new diesel gas tax rate, Overdrive reports.
- In general, the increases ranged from 2 to 17.5 cents, depending on the state and the time period of the full increase. Most states opt for a slow increase over a several year span.
- California will also see a 10-cent diesel gas price increase before the year's end.
Dive Insight:
In increasing desperation, state lawmakers are resorting to a last-ditch plan to repair their failing infrastructures by raising gas prices.
In one example, last April California passed a bill to increase the tax on diesel fuel by 20 cents per gallon over the next decade as a way to fund its $52 billion infrastructure plan, according to a report by Reuters. Non-diesel gas will also increase, rising from 28 cents to 40 cents per gallon during the same period, Total Landscape Care reports.
California expects to generate $10.8 billion toward infrastructure rebuilding costs by increasing both diesel and state tax rates, along with another $24.4 billion funneled from the 12 cent non-diesel tax increase. It also plans to instigate an annual vehicle fee costing motorists anywhere between $25 and $175, depending on the value of the vehicle. This should add another $16.3 billion annually.
Although the new tax rates will not take effect until Nov. 1, California Governor Jerry Brown and state legislators are relenting on their usually stringent greenhouse gas regulations for commercial trucks so that drivers have time to absorb the new diesel gas tax. Environmentalists have voiced numerous objections and complaints. The state’s Assembly, which needed 54 votes to pass the bill, voted 54-26 in favor.
The wide increases in diesel taxes show the previously politically unpalatable increases in gas taxes are becoming more popular nationwide, which adds fuel to the argument it is time to increase the national gas tax. So much so, even logistics mogul and FedEx CEO Fred Smith is considering including a gas tax hike in his new tax reform proposal.
