PORTLAND, Ore. (AP) — For Timothy Taylor, the pothole outside his Portland, Oregon, home was more than just an annoyance. It was a persistent problem, the clunk of cars hitting the deep dip audible inside his house.
Taylor, now used to avoiding it, could empathize with other drivers. He knew firsthand the damage potholes could inflict, having paid $1,000 to repair his car’s suspension because of a different one. “Hearing that awful sound of your car bottoming out — it’s horrible,” he said.
Oregon transportation officials are warning that without more funding, residents like Taylor could face further deterioration of roads, highways, and bridges, a trend expected to begin this year. The issue stems from a decline in revenue from the gas tax, a major source of funding for transportation infrastructure, as more people transition to electric and fuel-efficient vehicles.
While electric vehicles (EVs) contribute to reducing emissions, which is critical given that transportation is the largest source of greenhouse gasses, they also lead to decreased gas tax revenue. Carra Sahler, director of the Green Energy Institute at Lewis & Clark Law School, explained the dilemma: “We now find ourselves right now in a position where we want to address fuel use and drive down reliance on gases and internal combustion engines. But we need the funds to operate our roads that EVs need to use as well.”
According to the National Association of State Budget Officers’ most recent report on state expenditures, motor fuel taxes constitute the largest source of transportation infrastructure funding for states. However, the revenue generated has decreased. Gas taxes accounted for 41% of transportation revenue in fiscal year 2016 compared to approximately 36% in fiscal year 2024.
In California, where about a quarter of car sales involved zero-emission vehicles last year, legislative analysts predict that gas tax collections will decrease by $5 billion — or 64% — by 2035 if the state successfully achieves its climate goals. Like California, Oregon – along with several other states – plans to require all new passenger cars sold to be zero-emission vehicles by 2035.
The decline in revenue is also apparent in Pennsylvania, where the state’s independent fiscal office estimates that gas tax revenues fell by around $250 million last year when compared to 2019. Furthermore, inflation has increased labor and material costs for building and maintaining roads and bridges, compounding budget challenges.
To address reduced revenue, 34 states have increased their gas tax since 2013, according to the National Conference of State Legislatures. The U.S. Energy Information Administration reports that California has the highest gas tax, at over 69 cents a gallon, while Alaska has the lowest, at 9 cents a gallon. In Wyoming, the gas tax stands at 24 cents a gallon.
