If your wallet felt a little lighter during the first week of 2017, it wasn’t your imagination. In addition to paying off those Christmas bills, consumers across the country are paying more in state and local taxes – including gas taxes. Drivers in seven states are paying more for gas in 2017.
In my own state of Pennsylvania, drivers saw an increase of more than 15% at the turn of the calendar: that’s an increase of 7.9 cents per gallon to 58.3 cents per gallon in state taxes alone. The hike is due to a 2013 law aimed at improving infrastructure in the state; to help pay the bills, turnpike tolls are also going up (for progress on road work near you, check out PennDOT’s handy-dandy interactive map). When you add the federal gas tax of 18.4 cents per gallon, it boosts the total tax to 76.7 cents per gallon, making it one of the most expensive states in the country to fill up at the pump.
Not to be outdone, the Keystone state’s neighboring state of New Jersey also increased gas taxes. The state, previously known for its cheap gas, saw an uptick in gas taxes starting on November 1, 2016. A new law signed by Gov. Chris Christie (R) boosted the price of gas by 23 cents a gallon, the first hike in the state’s gas tax since 1988. Formerly the second lowest state in the country when it comes to gas taxes, the cost to fill up in New Jersey is now comparable with the rest of the country; the new taxes will cost the average driver in the state an additional $170. As in Pennsylvania, the additional revenue is targeted to road, bridge and rail projects. A similar hike on diesel went into effect on January 1, 2017.
Another state that saw a sizable increase in the gas tax is Michigan. The state gas tax spiked 7.3 cents per gallon, to 26.3 cents per gallon, on January 1, 2017. That increase was the first in two decades: combined with federal excise taxes and sales tax, Michigan now has the fifth highest tax burden on gas in the country. As in Pennsylvania and New Jersey, the additional revenue is targeted to fixing roads and bridges.
Motorists won’t see quite as high an increase in Nebraska, where the tax was boosted just 1.5 cents per gallon. The increase, however, is part of a plan to raise the gas tax by 6 cents per gallon over four years. In 2017, Cornhusker drivers will pay 29.2 cents per gallon in gas tax. Not surprisingly, money raised by the tax is to be used for infrastructure improvements.
Three southern states, Georgia, North Carolina and Florida, will see modest increases of less than a penny per gallon. State gas taxes in those states range from 31.3 cents per gallon (Georgia) to 36.7 cents per gallon (Florida). Indiana will also see a small increase at the pump.
With those changes in gas taxes, combined with federal and other taxes, AAA says the most expensive states to buy gas during the first week of the new year were:
- Hawaii ($3.01)
- California ($2.76)
- Alaska ($2.68)
- Washington ($2.67)
- District of Colombia ($2.59)
- Pennsylvania ($2.57)
- New York ($2.52)
- Illinois ($2.49)
- Oregon ($2.48)
- Connecticut ($2.47)
The least expensive states to buy gas were:
- South Carolina ($2.10)
- Arizona ($2.12)
- Alabama ($2.13)
- Tennessee ($2.13)
- Mississippi ($2.14)
- Texas ($2.14)
- Arkansas ($2.15)
- Louisiana ($2.15)
- Oklahoma ($2.15)
- Missouri ($2.18)
According to AAA, the average price at the pump across the country for the new year was $2.34 per gallon. That represents increases of five cents per gallon for the week, 18 cents per gallon for the month, and 34 cents per gallon for the year.
