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More States Eye Gasoline Tax Hikes

NATIONAL REPORT-- Despite a slow downward trend in average gas prices, drivers in several states may see higher pump prices as legislators consider raising gasoline taxes, according to a Reuters report. State budgets in need of money for investment in the infrastructure of roads, bridges and public transportation are prompting the usually unpopular move.

Wyoming raised its gas tax rate from 14 cents per gallon to 24 cents per gallon this February for the first time in 15 years. Michigan, Pennsylvania, Maryland and Vermont may follow suit if they act on rate increases proposed by their governors, and yesterday the New Hampshire House Ways and Means Committee held a hearing on a bill that would increase the state's gas tax from 18 cents a gallon to 33 cents, reported the Associated Press. The committee is expected to vote on the tax proposal and various alternatives next Tuesday, followed by a full House vote later in March. The proposed change would mark the first gas tax increase for New Hampshire in 22 years.

Detractors of the various proposed increases say the country's economic recovery is too precarious to raise taxes, but proponents believe it is necessary for drivers across the United States, which faces an $846 billion shortfall in road and surface upkeep by 2020, according to the American Society of Civil Engineers. Overall higher gasoline prices in recent years have not helped, due to the development of more fuel-efficient vehicles that have cut the actual number of gallons purchased.

"It's understandable that drivers don't want to see gas prices go any higher, but they also don't want to see congestion and road conditions get any worse," stated Carl Davis, an expert on state taxation at the Institute on Taxation and Economic Policy.

Other methods of generating funds for infrastructure have had mixed results. New Hampshire's highway fund sold a 1.6-mile stretch of freeway to the state's turnpike fund to shift $120 million into the road maintenance budget, according to the report. Wyoming previously paid for road upkeep from its general fund, which was sizeable due to a healthy mining industry, but the recession had a negative effect on the fund. In a surprising move, the normally anti-tax group Wyoming Taxpayers Association supported the hike, which takes effect in July.

Maryland Gov. Martin O'Malley and other Democratic legislators plan to generate $800 million a year in transportation funding by taxing wholesale fuel sales and indexing the gas tax to inflation. The state's gas tax has not increased since 1992, and its highway budget for new construction will drop to zero in 2017 without it, said O'Malley, but the move faces strong opposition. Maryland Republican Party Executive Director David Ferguson stated that his party plans to oppose the increase, and a January poll of Maryland residents by Gonzalez Research showed that while 94 percent of them believe in the importance of maintaining and improving transportation, 73 percent oppose increasing the gas tax.

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