Raise the Gas Tax. To cope, at least 12 states will consider raising the gas tax in 2009. It was difficult to raise this issue when gasoline prices hovered at $4 per gallon. Research shows that the average state would need to raise the gas tax by 20 cents per gallon to make up purchasing power lost during the last 15 years; however, most proposed state increases will not exceed 5 cents. Given plunging gasoline prices, many legislators are beginning to think that a small increase could be somewhat more palatable to motorists.
Use General Sales Tax Revenue. A few states considered increasing the general sales tax and designating it to transportation. The argument is that, because transportation underlies the economy and quality of life, it is therefore a common good, rightly supported with general revenue. Louisiana took this approach in 2008, while Arizona considered it. This represents a shift from the user fee approach underlying the gas tax and road tolls. Many local governments already use sales taxes extensively to fund transportation, and several states will consider this approach in 2009.