MetaTOC stay on top of your field, easily

Raising State Gas Tax Rates for Transportation Revenues: Navigating a Bumpy Road

,

Journal of Planning Education and Research

Published online on

Abstract

State funds for surface transportation are not only key for roadway investments but generally instrumental for transportation planning at all levels. State fuel taxes still represent a major revenue source of transportation funds. This paper makes two contributions. First, we seek to identify a revenue-optimizing gas tax rate. We find that there is considerable room for the majority of states to increase tax rates before reaching the fiscally optimal gas tax rate. Second, the road to maximizing transportation funds through gas tax hikes is bumpy with multiple countervailing forces that may undermine the revenue-enhancing capacity of the tax increases.