Taxes fuel transportation funding.

• Author: Pula, Kevin
• Position: TRENDS

The Trump administration is refueling the perennial conversation on infrastructure and transportation spending--albeit with some uncertainty.

Talk in Washington, D.C., has focused on financing and private-sector investment strategies, but the scope has been unclear. Meanwhile, statehouse leaders in at least 16 states are considering bills to increase motor fuel taxes in hopes of providing additional resources for maintaining, operating and upgrading transportation networks. Further, some lawmakers have expressed the need to increase revenues to be ready to leverage the potential financing options created under a Trump administration infrastructure plan. Leaders in another eight states have announced plans to introduce similar legislation.

New Jersey was the only state to enact a motor fuel tax bill in 2016. Legislative action so far this year is more on par with that in 2015, when eight states enacted measures to increase fuel taxes to some degree and two others restructured their taxes.

In recent years, states have explored alternatives to the historical cent-per-gallon fuel-tax model. Variable-rate or indexed fuel taxes, which...