Fuel-Tax Roundup

CHICAGO -- This year is proving to be an especially active one for fuel-tax increases.

On a national level, President Trump appeared open to the idea of raising the federal fuel tax, which has sat at 18.4 cents per gallon (CPG) for gasoline and 24.4 CPG for diesel for nearly 24 years. “It’s something that I would certainly consider,” Trump told Bloomberg, “if we earmarked money toward the highways.”

White House press secretary Sean Spicer has since walked back Trump’s comments, and Republican leaders do not seem to endorse raising the federal fuel taxes, The Hill reported.

In the meantime, the action will be squarely on the local level, as several states are positioned to raise fuel taxes in 2017 to meet infrastructure funding and budget needs.

Here are three states that have already raised their fuel taxes this year ...

California’s 27.8 CPG gasoline tax currently includes an 18-CPG base excise tax and a 9.8-CPG price-based excise tax. In late April, Gov. Jerry Brown (D) signed into law Senate Bill 1, which raises the base excise tax to 30 CPG on Nov. 1, 2017, and increases the price-based tax to 17.3 CPG on July 1, 2019. In July 2020, the state will begin adjusting the combined 47.3-CPG state tax for inflation, according to The Sacramento Bee.

This would rank California just behind Pennsylvania as having the second-highest state gasoline taxes in the United States.

Diesel taxes are also set to increase under the new law. The 16-CPG base excise tax will grow to 36 CPG on Nov. 1, 2017, and be adjusted for inflation beginning July 2020. A 1.75% sales tax also levied on diesel will grow to 5.75% in November 2017.

Indiana Gov. Eric Holcomb (R) signed a highway improvement bill in late April that will raise the state’s gasoline tax by 10 CPG to reach 28 CPG on July 1, 2017, The Indianapolis Star reported.

When combined with other state and federal fees, taxes on a gallon of gas would total 61.24 CPG, according to figures from the American Petroleum Institute. This would make Indiana’s combined gasoline taxes higher than in neighboring states, including Illinois, where taxes total 52.15 CPG, Michigan (59.34 CPG), Ohio (46.41 CPG) and Kentucky (44.4 CPG).

Teneessee Gov. Bill Haslam (R) signed the IMPROVE Act in late April, increasing that state’s gasoline tax by 6 CPG and its diesel tax by 10 CPG over a span of three years, according to the Times Free Press. This would bring the state's gas tax to 27.4 CPG and its diesel tax to 28.4 CPG.

The gas tax would first increase to 4 CPG on July 1, and then grow by 1 CPG in 2018 and 2019. The diesel tax would increase by 4 CPG on July 1, followed by 3-CPG increases in 2018 and 2019.