Wyoming just approved a 10-cent per gallon hike in their fuel tax. It had pretty sweeping support… people will actually vote in favor of tax raises for obvious infrastructure needs.

Not only is Virginia placing a levy against alternative fuel vehicles, they are also drastically reforming the funding structure. A few highlights:

• Dropping the 17.5 cent fuel tax
• 3.5% wholesale tax on gasoline
• 6% tax on diesel fuel
• Boost state sales tax by .3% and shift $200 million a year from sales tax into the highway fund

Kind of interesting. That wholesale tax is just going to get passed on to consumers. And making the fuel taxes percentage instead of fixed means that as fuel prices rise they state will get more revenue… to a point. At some point rising fuel prices triggers a decrease in demand. I’ve not heard of anyone else doing fuel tax by percentage like this.

So Virgina just past a transportation bill that will up the fee for registering hybrid, electric, and alternative fuel vehicles. Expect to see a lot more of this.

So many state transportation bills rely heavily on gas taxes, as do federal bills. On the one hand we want people moving to more fuel efficient vehicles but on the other hand a reduction in consumption is a reduction in revenue. People have to pay for their fair share for the wear-and-tear of the infrastructure. The gas tax no longer provides funding that is proportional to use. Technology is to the point where we could easily move to a pure usage tax for the roads. Why don’t we?