Reuters

(Reuters)

New Jersey Gas Tax Hike: Will Your State Be Next?

By Politics

As New Jersey residents adjust to paying more at the pump thanks to a fat gas tax that kicks in today, drivers in other states are on edge--especially those with bridges and roads badly in need of repair.

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“Many other states are facing similar issues, but haven’t raised the gas tax in a decade or more,” said Carl Davis, research director at the Institute on Taxation and Economic Policy. “It can be a political challenge.”

Maybe so, but now the winds of change are in the air. First, the economy is improving. The first read of third-quarter GDP rose a better-than-expected 2.9% according to the Commerce Department. At the same time, job growth is accelerating and gas prices remain near historical lows, giving consumers more spending power.  

Toss in the race for the White House with both Hillary Clinton and Donald Trump touting their plans to improve U.S. infrastructure if elected.

That may mean others will soon follow the Garden State’s lead.

In fact, Davis expects that lawmakers in more than a dozen states, including Louisiana, Tennessee, Alaska, Alabama and Minnesota, will debate raising gas taxes in 2017. 

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These debates are part of a larger trend, as 19 states have already increased or reformed their gas taxes since 2013.

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“There is a large group of states who are today in agreement that updates to our transportation infrastructure are necessary – and long overdue,” Davis said.

Furthermore, since efforts to raise the federal gas tax in recent years have gone nowhere, “states are taking the matter into their own hands and finding the funding on their own,” Davis said. The federal tax rate stands at 18.4 cents/gallon, where it has been for some 23 years.

“They know they can’t procrastinate any longer—nor should they,” Davis added. “At a certain point, states that are not updating their gas rates aren’t doing motorists any favors if we’re hitting potholes or having to get our cars aligned because of the poor condition of our roads.”

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