States raising taxes, fees and debt to pay for road repairs

About one-third of the states have taken action this year to boost funding for transportation or shore up their road and bridge funds against excepted declines in tax revenues. Here’s a look at what those states have done.

• CONNECTICUT

Legislation signed June 30 by Democratic Gov. Dannel P. Malloy authorizes $2.8 billion of bonding that will be combined with existing funds under a special $10 billion, five-year transportation plan. The bonds will be repaid, in part, by diverting one-half cent of Connecticut’s existing general sales tax to a transportation fund. The program is just the start of what Malloy hopes will become a 30-year, $100 billion overhaul of the state’s transportation system.

• DELAWARE

Legislation signed by Democratic Gov. Jack Markell increases the tax on vehicle sales from 3.75 percent to 4.25 percent and raises various fees, such as for late vehicle and driver’s license renewals. Revenues from the higher taxes and fees, which take effect Oct. 1, will allow for additional bonding. The measure is expected to generate $330 million over six years for transportation.

• GEORGIA

Legislation signed by Republican Gov. Nathan Deal is projected to raise an average of $1 billion annually over the next five years for transportation. Starting July 1, it converted the state’s current mix of fuel taxes to a new tax of 26 cents a gallon on gasoline and 29 cents on diesel. It also imposed a new $200 fee on electric vehicles, eliminated a $5,000 tax credit for buying electric cars; imposed new fees of $50 to $100 on heavy trucks; charged $5 per night on hotel stays; and ended a tax break on jet fuel at Atlanta’s Hartsfield-Jackson International Airport.

• IDAHO

Legislation signed by Republican Gov. C.L. “Butch” Otter raised the state fuel tax by 7 cents a gallon and vehicle registration fees by $21, effective July 1. That’s projected to generate $95 million annually for transportation. But the new revenues likely will be higher, because the law also allows a percentage of the year-end surplus in the state’s general fund to be used for transportation. This year, that meant an additional $54 million for transportation.

• IOWA

Legislation raising Iowa’s fuel tax by 10 cents a gallon took effect March 1, just days after it was signed into law by Republican Gov. Terry Branstad. The fuel tax increase, which is the state’s first since 1989, is projected to raise $215 million annually for roads and bridges.

• KENTUCKY

Legislation signed by Democratic Gov. Steve Beshear blocked most of a gas tax reduction that had been scheduled to take effect April 1 under an existing law linking the state’s tax rate to wholesale fuel prices. Instead of falling from 26.2 cents a gallon to 22.1 cents, the fuel tax rate was frozen at 26 cents a gallon by the legislation. The measure averted much of a projected $150 million cut to the road fund.

• LOUISIANA

A measure referred to the Oct. 24 ballot by the Republican-led Legislature would change the state’s “rainy day” fund to direct money toward transportation when revenues exceed certain thresholds. It’s estimated to generate $21 million over the next five years and as much as $100 million annually in later years. Lawmakers also passed a measure capping how much gas tax money can be diverted to state police from a transportation fund.

• MAINE

A measure referred to the Nov. 3 ballot by Maine’s politically split Legislature would authorize up to $85 million of bonds, including $68 million for roads and bridges and $17 million for other modes of transportation. The new state revenues would be used to match more than $121 million of funding from the federal government and other sources.

• MISSISSIPPI

Legislation signed April 22 by Republican Gov. Phil Bryant authorizes $200 million of bonds to rebuild deficient bridges. The bonds are to be repaid with an estimated $36 million annually from existing taxes on casinos.

• NEBRASKA

The Legislature, which is officially nonpartisan but dominated by Republicans, voted May 14 to override Republican Gov. Pete Ricketts’ veto of a bill gradually increasing the fuel tax by 6 cents a gallon over four years. The measure, to take effect Jan. 1, is projected to generate about $215 million over the first five years and about $76 million annually when fully phased in.

• NEVADA

Legislation signed June 5 by Republican Gov. Brian Sandoval and referred to the November 2016 ballot would allow counties to link their local fuel taxes to the rate of inflation. If approved by voters, the measure could lead to millions of additional dollars for transportation.

• NORTH CAROLINA

Legislation signed by Republican Gov. Pat McCrory slightly reduces the fuel tax but averts a larger, projected 7-cent decline that had been expected to occur July 1 because of lower fuel prices. The new law dropped the state’s tax from 37.5 cents a gallon to 36 cents April 1 and will reduce it to 34 cents by July 2016 while also changing future inflationary calculations. The state is projected to lose $81 million of gas tax revenues this year under the new law, instead of the previously expected reduction of $345 million.

• SOUTH DAKOTA

Legislation raising fuel taxes by 6 cents a gallon took effect April 1. The new law also raised vehicle sales taxes and license fees while increasing the speed limit to 80 mph on two major interstate highways. The law is expected to generate $85 million its first year and around $400 million over five years for transportation.

• TEXAS

A proposed constitutional amendment referred to the Nov. 3 ballot by the Republican-led Legislature would redirect existing taxes to transportation. The state highway fund would gain $2.5 billion annually from general sales tax revenues starting in September 2017. It also would gain 35 percent of vehicle sales tax revenues above a certain threshold, starting in September 2019.

• UTAH

Legislation signed by Republican Gov. Gary Herbert will link Utah’s tax to the price of fuel, effective Jan. 1, instead of the current per-gallon tax. It’s projected to generate $25 million the first year and about $75 million annually thereafter. The new law also allows counties to put a one-quarter cent sales tax on the ballot this fall, which could raise millions more for local transportation projects.

• WASHINGTON

Legislation signed July 15 by Democratic Gov. Jay Inslee raised the fuel tax by 7 cents a gallon on Aug. 1 and will raise it an additional 4.9 cents in July 2016. The new law also authorizes additional bonding and raises various fees, including on vehicle registrations. The package is projected to generate $16 billion over 16 years for transportation.

JEFFERSON CITY, Mo. — While Congress remains stalled on a long-term plan for funding highways, state lawmakers and governors aren’t waiting around.

Nearly one-third of the states have approved measures this year that could collectively raise billions of dollars through higher fuel taxes, vehicle fees and bonds to repair old bridges and roads and relieve traffic congestion, according to an analysis by The Associated Press.

The surge of activity means at least half of the states — from coast to coast, in both Republican and Democratic areas — now have passed transportation funding measures since 2013.

And the movement may not be done yet.

Tennessee’s governor is in the midst of a 15-city tour highlighting the state’s transportation needs. North Carolina lawmakers are debating a road-bonding proposal. And legislators are returning to work this week in California and Michigan with transportation funding on the agenda.

“I don’t know of a state that’s not having the conversation” about raising revenue for transportation, said Iowa Transportation Director Paul Trombino III, who is vice president of the American Association of State Highway and Transportation Officials and whose home state recently raised fuel taxes by 10 cents a gallon.

The widespread focus on transportation funding comes as state officials are becoming frustrated by federal inaction in helping to repair roads and bridges described as crumbling, aging and unsafe.

About 20 percent of the nation’s 900,000 miles of interstates and major roads need resurfacing or reconstruction, according to one analysis of federal data. A quarter of the 600,000 bridges are considered structurally deficient or functionally obsolete. That doesn’t necessarily mean they are about to fall; it means they are showing worrisome problems or are no longer adequate for today’s traffic.

“There’s a lot of voices that say let’s push this off,” said Tennessee Gov. Bill Haslam, whose call for more transportation funding has been opposed by some fellow Republicans. “But the need is not going to go away. We’re going to have to do something to address this.”

In many states, the new money is going primarily toward repairing old infrastructure, though some projects — such as a new four-lane U.S. 20 across Iowa — are designed to ease congestion so that commerce can flow more freely.

Congress has yet to agree on long-term funding to supplement the states’ efforts. Instead, it recently passed its 34th short-term extension of the nation’s transportation program since 2009, ensuring only that states will continue to receive federal highway funding through Oct. 29.

Federal dollars, on average, cover about half of a state’s capital expenditures for roads and bridges, according to the American Road & Transportation Builders Association. But the money available from the Federal Highway Trust Fund declined 3.5 percent during the five-year period ending in 2013, the latest year for which numbers are available, because of improved fuel economy and other factors. The fund receives money from federal taxes on gasoline and diesel.

Regardless of what Congress ultimately does, some state officials say more taxpayer money will be required to update their aging infrastructure for the modern economy. The newly passed measures put only a dent in a backlog of projects.

In Connecticut, for example, legislators recently approved $2.8 billion of additional transportation bonding over the next five years. But that’s just the start of what Democratic Gov. Dannel Malloy hopes will be a 30-year, $100 billion overhaul of the state’s transportation system.

Idaho Gov. C.L. “Butch” Otter, a Republican, signed a law this spring raising the fuel tax by 7 cents a gallon and increasing vehicle registration fees. That’s projected to raise $95 million a year, barely a third of the $262 million annual shortfall in the transportation system.

Legislators in Kentucky and North Carolina– where tax rates are linked to the price of fuel — passed measures to avert large cuts caused by falling fuel prices. But those bills didn’t generate any additional money.

Though politicians often talk about coming up with creative ways of funding roads, many states have resorted to the traditional means of taxing and borrowing. That’s caused consternation for some Republicans who have campaigned against such things. But it helps that 2015 isn’t an election year.

Nebraska’s single-house legislature, which is dominated by Republicans, overrode Republican Gov. Pete Ricketts’ veto to enact a 6-cent-a-gallon fuel tax increase.

“I had to do a great deal of soul-searching” on a fuel tax increase, said sponsor Sen. Jim Smith, a conservative Republican. But he added: “The magnitude of the (transportation) backlog was so large that we would not be able to tackle that with gains and efficiencies alone.”

Transportation economist George Hoffer of the University of Richmond in Virginia said many politicians find it more palatable to raise the fuel tax than other taxes because “it’s considered equitable — the more you use, the more you pay.”

Also, because fuel prices regularly fluctuate, it’s sometimes harder for motorists to notice the added tax.

“If it’s infrastructure-related, that’s a legitimate reason to raise it,” said motorist Lauren Sharkey of Spokane, Washington, where the state gasoline tax increased by 7 cents on Aug. 1 as part of a new 16-year, $16 billion transportation plan.

In states that haven’t raised road taxes, some local governments are forging ahead on their own. A new 4-cent-a-gallon gas tax took effect in July in Normal, Illinois. A 5-cent hike is to kick in Jan. 1 in Osceola County, Florida, just south of Orlando.

Some transportation tax plans have been rejected by voters. Missouri and Michigan, where measures were defeated, are now pondering alternatives.

Frustrated that others have acted while his home state has not, Missouri transportation commission chairman Stephen Miller has been distributing newsletters warning that his agency has “a huge problem” and “no ready solution.” Within a decade, he says, 75 percent of Missouri’s secondary roads could be in poor condition.

“At both the federal level and the state level, everyone says transportation is incredibly important, we have a need, we are underfunded, and then nobody can agree on how to do that,” Miller said.