The Gas Tax Index Formula

My bill increases the current rate by 5 cents to 21.75 cents per gallon and then indexes the fee to the 10 year average CPI rate (inflation rate).

The 5 cent increase represents the inflation growth over the last 10 years rounded up to the next full cent.

A driver who averages 16,000 miles per year at 20 mpg would pay an additional $40 per year.

Based on the average growth rate of gallons consumed as reflected in the TRAC report, I anticipate the new gas tax rate to grow by .5 cents (one half cent) per gallon per year.

The bill has an annual cap of 1.5 cents per gallon to avoid a massive increase in any one year.

The bill directs all additional revenue to the State Highway Fund exclusively.

The bill links hybrid and electric vehicles to the index.

This approach should allow the DOT funding to reach $1 billion within 10 years. Note that they say their current needs approach $1 billion, so we are not fully funding them immediately. This is by design.

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