OREANDA-NEWS. July 03, 2017. A growing number of US states are doing what has long been considered taboo — raising taxes on gasoline and diesel — as lower pump prices and long-neglected roadways make the moves more palatable.

Nine states, including Michigan, South Dakota and Washington passed legislation to raise taxes in 2015, while New Jersey acted alone in enacting legislation in 2016. So far in 2017 seven governors have signed off on increases — six states will raise gas taxes on July 1 and one more will follow on September 1. Several other states are debating increases to meet infrastructure needs.

The tax increases have not come easily — New Mexico saw a bill passed by lawmakers die at the governor's desk and a Louisiana bill was shelved by representative Stephen Carter (R) after he failed to gather 70 votes. But as a US Department of Transportation report released in January reveals $926bn in unmet infrastructure needs, other states see fuel taxes a much-needed lifeline.

California faces a $59bn deficit to maintain its state highways over the next ten years while its cities and counties face an even larger $78bn road fund deficit, according to lawmakers. Through its 12?/USG gas tax increase and 20?/USG diesel tax increase on 1 September, the state should generate over $50bn in revenue over the next ten years. Of that $15bn will go to local roads and another $15bn will go to state highways. That level of funding appears to be a flat-to-modest-increase over 2015 funding levels of $1.5bn to state highways and $1.4bn to local roads.

Governor Henry McMaster (R) vetoed South Carolina's gas tax increase on 10 May, but legislators rallied and overrode the veto the next day. The state's tax hike will occur in increments of 2? beginning 1 July and ending after 1 July 2019, generating almost $69mn in 2018 for the Infrastructure Maintenance Trust Fund.

Indiana hopes to generate about $430mn from its 10?/USG gas and diesel fuel tax increase and allocate about $358mn to its state highway fund. In Tennessee, the 6?/USG gas increase and 10?/USG diesel fuel increase should help generate $278mn for 962 projects. With the 6?/USG fuel tax increase and 2?/USG diesel fuel increase, Montana's department for transportation will receive $12.5mn in 2018 and $9.8mn in 2019.

West Virginia became the most recent state to pass a fuel tax increase on 22 June. Unlike the other states increasing the excise tax, West Virginia will keep its 20.5?/USG excise tax and instead increase the floor for its variable tax on gasoline and diesel from 11.7?/USG to 15.2?/USG — a change that will yield $44.8mn in 2018 and $49.3mn annually in 2020 and beyond for the State Road Fund. West Virginia initially considered increasing the excise tax to 22?/USG, an increase which would have brought in an additional $14.9mn in 2018 and $16.3mn annually by 2020.