This 4th of July, a record-breaking 46.9 million Americans will travel 50 miles away from home, or more, according to predictions from AAA. Not only will there be a 5% uptick in long distance travelers on the road this year, but there will also be a slight uptick in gas prices across 7 states.
Oklahoma, South Carolina, Indiana, Maryland, Tennessee, Vermont, and Iowa all raised gas taxes ahead of the Independence Day.
Tomorrow, gas taxes are set to rise in 7 states. This will be the first time the rate goes up in Oklahoma in the past 31 years. https://t.co/vygsKf5owX
— ITEP (@iteptweets) June 30, 2018
But gas taxes in these 7 states are still low when compared to the national average. In fact, South Carolina and Oklahoma have the 2nd and 3rd lowest gas tax rates in the country (right behind Alaska).
The recent tax hike in Oklahoma is the largest increase in gasoline prices out of the 7 states, and the last time Oklahoma raised its gas tax the Berlin Wall was still standing. This 3 cent increase is in response to the state’s largest teachers unions collective bargaining efforts which won average wage increases of $6,100 for teachers and $1,250 for support staff.
The 2 cent per gallon tax hike is the second installment of a six-year 12-cent tax increase which will offset historically high spending on road work. Before the passage of this legislation, South Carolina’s gas tax hadn’t been increased in 30 years. Even with this incremental change, South Carolina gas tax remains among the lowest nationwide.
Lawmakers in Indiana passed a bill last year that raised the 18-cent per gallon tax to 28-cents per gallon in an effort to fund road repairs. The bill also included an inflationary adjustment provision which will increase the gas tax each year until 2024.
Just like Indiana, gas tax rates are tied to inflation and have been increasing steadily since 2013.
Back in 2017, Tennessee Gov. Bill Haslam signed into law a piece of legislation which increased the gas tax to help fund a $10 billion backlog in road projects across the state. The 1 cent increase this year is part of an inflationary adjustment provision.
Vermont’s gas tax is linked to the actual price of gas, and the slight uptick in gas prices led to the $0.42 increase.
There is little change in Iowa in the form of gas tax hikes. The measly 2 cent increase only impacts fuels that are not blended with ethanol. Since most fuel in the state is ethanol-blended fuel, most residents in the state will be unaffected by this change.
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