Gas Prices; a Taxing
The other day I was reading the October 2017 edition of Car and
Driver magazine and came across an article titled, “Infrastructure
Rupture”. The focus was a statistical review of all 50 states
regarding the size and condition of their highways, bridges and gas
prices, or rather gas taxes. The assumption, not always correct,
is that taxes on gasoline go toward road and bridge construction and
maintenance. I usually find these data heavy graphic presentations
a bit tedious to read through and comprehend, but this one looked pretty
simple, so I lingered over the two page spread.
Every four years the American Society of Civil Engineers (ASCE)
issues a report card on our country’s infrastructure. No
surprising, our infrastructure rated a D+ overall. Roads earned(?)
an embarrassing D while bridges did only marginally better with a C+.
The ASCE says there is a $2 trillion funding gap between current
projects and what is actually needed for improving the state of our
roads and bridges. Chris and I have done a lot of traveling on our
roads and can attest that they are, to varying degrees, in need of
serious attention. That said, we find that traveling in
Pennsylvania is a constant hurry up and wait from one road construction
project to another.
Road improvement is largely dependent on the federal tax on gasoline
(18.4 cents/gallon) and diesel fuel (24.4 cents/gallon). These
taxes have not been raised in 25 years. Maybe it’s time?
Generally state taxes on gas exceed the federal tax but vary greatly
from state to state. Here are some interesting facts I learned.
Highest state gasoline tax: The winner is ...Pennsylvania at a
whopping 58.2 cents/gallon. Add in the federal tax and you pay a
jaw dropping 76.6 cents/gallon in taxes. Lesson here is fill up in
Virginia before traveling to or through PA. The tax in Virginia is
a modest 22.4 cents/gallon. Just 12 states have a lower tax.
Lowest state gasoline tax: The winner is...oil rich Alaska with
a tax of just 12.3 cents/gallon. Not very convenient but it you
are traveling south to let’s say the Amelia Island Concours or the
Sebring 12 Hour race in Florida, you might want to plan to stop in South
Carolina which has the second lowest tax at a mere 16.8 cents/gallon.
State with the most miles of public road: Surprising to me,
Utah tops the list with 313,596 miles of roads, only 10% of which are
considered in to be in poor condition. That’s 117,762 miles more
than second place California which has the dubious distinction of being…
State with the worst roads: California is second on the bad
roads list with 50% of their 195,834 miles of public roads rated in poor
condition, bested only by Connecticut with a whopping 57% considered in
State with the most bridges: Surprising to me Texas has by far
the most bridges of any state. Guess when you have the second
largest land area there are a lot of bridges to link it all together.
Texas can proudly boast that just 2% of their bridges are structurally
deficient. That ties them with the dry bones state of Nevada which
has only 1,933 bridges to care for.
State/district with the fewest bridges: No surprise here, the
District of Columbia has just 245 bridges to maintain and they do a
pretty good job with just 4% rated structurally deficient. The
state with the lowest number of bridges is little Rhode Island with 772
State with the worst bridges: Rhode Island doesn’t have
many bridges to maintain but they need to up their game; 25% of them are
structurally deficient. Tsk, tsk. Based on my travels this
summer, no surprise that Pennsylvania comes a close second with 20% of
their 22,791 bridges in desperate need of repair. Believe me, they
are working on them! Just take a drive north on I-81 and you’ll
see what I mean.
The bottom line is this. Taxes on gasoline account for about
18% of the price you pay. The price of crude oil foretells the end
price at the pump since it accounts for about 51% of the cost. As
we all know, the price of crude can vary greatly depending on a wide
variety of factors including the weather. Did you notice how the
price at the pump jumped about 25% after hurricane Harvey hit the Gulf’s
off shore rigs and on-shore refineries? Refining accounts
for about 23% of the cost of gas while getting the product to the pumps
costs another 8%. The gas station, typically locally owned, only
makes about 5 cents on a gallon of gas you put in your tank. Most
of their profit comes from the other stuff they sell. Consider
your local Sheetz station for example...
Here's an American Petroleum Institute map that shows
combined local, state and federal gas taxes as of 1 April 2015.