Increase in Gas Prices

Many are predicting an increase in gas prices this year; not due to the depletion of resources, but as a way to help fund state governments. Joe Wertz, Gas Taxes May Go Up Around The Country As States Seek To Plug Budget Holes,, (Jan. 12, 2017). Legislators are considering tax increases on gasoline and diesel to generate revenue for the state government. Id. About 12 states in total are seriously considering the tax hike, including Oklahoma, Mississippi, Louisiana, and Alaska. Id.

Oklahoma, for example, is faced with a nearly $900 million deficit in their state budget. Id.  However, the state’s taxes on gasoline and diesel have not increased since 1987. Id. Since the tax, which is 16 cents per gallon of gasoline and 13 cents per gallon of diesel, has not changed in 30 years it is no longer effective due to inflation. Id. Currently, Oklahoma one of the lowest fuel tax in the country. Id.

In Oklahoma the majority of the fuel taxes go directly to improving state transportation systems, such as paying for programs that maintain/build highways and bridges. Id. The fuel tax may also have benefits for the environment, by reducing the amount people drive due to higher fuel costs. Id. However, some believe the new taxes are having adverse impacts on the poor because the affect low-income people more than people with higher incomes. Id.