Gas Taxes Rise Across the US in Time for Record-Breaking July 4th Travel

Several states across the United States have hiked their gasoline taxes this week.

The increase in gas taxes for motorists in seven states comes just in time for Independence Day travel. This week is set to be a record breaking 4th of July for automotive travel across the country.

According to projections by the Automotive Association of America, nearly 47 million Americans will hit the road. And that only includes those who plan to drive 50 miles or more for their vacation. For the purpose of this prediction, the AAA used data for the days of Tuesday through Sunday.

AAA Travel and Publishing Senior Vice President Bill Sutherland explained what that means for travelers. He said this July 4th "will be one for the record books." Sutherland explained that more travelers are expected to "take to the nation's roads, skies, rails and waterways than ever before."

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Credit: Wikimedia Commons, B137

Gas taxes in one state are going up for the first time in more than three decades. 

Oklahoma motorists will probably feel the hike more than most Americans behind the wheel. A new rate went into effect in that state for the first time in 31 years.

Six other states decided to raise their gasoline tax on the same day. If you live in any of these states, more of what you pay for a gallon will be going to the government. The good news, if you could call it that, is these are states where the tax is already generally low. In addition to Oklahoma, they include South Carolina, Indiana, Maryland, Tennessee, Vermont and Iowa. As it turns out, one lone state opted to lower its gas taxes. In Nebraska, the rate went down slightly on Sunday.

If you live in these states, perhaps a more fuel efficient vehicle just became a little more attractive.

It might be just a few pennies here and there, but it adds up quickly.  

In Oklahoma, the price of a gallon of unleaded gasoline went up three cents on Sunday. Diesel went up six cents per gallon. But even with those increases, the state's drivers still pay among the lowest rates in the country. In Oklahoma, drivers pay 19 cents per gallon in gas taxes. Still, most states have a higher rate. And the Sooner State had not raised the rate since 1987 before this week's hike. 

The research director for the Institute on Taxation and Economic Policy put that hiatus in perspective. Carl Davis pointed out that "the Berlin Wall was still standing" when the state last raised gas taxes. He also noted that "Congress was debating whether to ban smoking on flights shorter than two hours" at that time.

Drivers in other states will see smaller increases in their gas taxes. South Carolina is rolling out a series of six increases, including a 2 cent increase in both gas and diesel on Sunday. In Indiana, gas taxes went up 1.8 cents per gallon and diesel went up 1 cent. Both gas and diesel taxes in Maryland went up 1.5 cents per gallon. Diesel shot up 3 cents per gallon in Tennessee while gas taxes increased by 1 cent. The remaining states, Vermont and Iowa, saw increases of less than a penny per gallon.

So what's behind the hikes in gas taxes around the country?

While state government approve taxes for a variety of reasons, there is a common theme behind many of these. And as it turns out, it is a cause almost everybody can get behind. After teacher protests sparked increase in pay and funding for public schools educators, lawmakers responded. 

Teachers in states including Oklahoma, West Virginia and Kentucky voted to give teachers more. But the funding had to come from somewhere. In many states, that means a rise in gas taxes. Cigarettes are another popular source. In states where teacher pay raises were voted into effect, the average teacher will now earn $6,100 more annually.

No matter where the money comes from and what it funds, it's undeniable that this will have a major impact on travelers. Are you planning on traveling for the 4th of July? Let us know your thoughts on the gax tax hikes in the comments below.

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