With more fuel-efficient automobiles and the growing popularity of electric vehicles, states like Utah are having to get creative with how they collect tax revenue to fund transportation and infrastructure improvements.
Utah’s gas tax is $0.5755 per gallon. Of that, $0.3915 goes to the state and the rest goes to the federal government. The state collected $451,893,186 through the gas tax in the 2024 fiscal year.
“One hundred percent of [the gas tax] goes to fund transportation, so, infrastructure,” said Utah Tax Commission Deputy Executive Director Jason Gardner. “There is some element of it that is transportation enforcement as well.”
According to state data, revenue collected from the gas tax has steadily increased in recent years. In the 2024 fiscal year, for example, the state collected 5.6% more — or roughly $24 million — than it did in the 2023 fiscal year.
That’s a good thing for Utah’s roads. Less revenue means fewer new projects and maintenance, which could lead to a decline in the quality of roads and bridges.
“If the number of vehicles on the road is increasing at a greater rate than the fuel tax percentage is increasing, that's an additional burden on the roads with a decreased revenue source to pay for that burden on the infrastructure,” Gardner said.
The same can’t be said for other states. Oregon’s Department of Transportation faces a $350 million budget shortfall thanks in part to factors like inflation and declining gas tax revenues.
Despite the relatively rosy outlook compared to other parts of the country, some experts, like Utah Taxpayers Association President Billy Hesterman, still say the system “isn't collecting enough” to pay for statewide transportation projects.
“We do feel that is one area that is not capturing enough of the users to keep up with the cost of roads,” he said.
To help address the additional need, the state has taken steps to prepare itself for a decline in gasoline sales in the future. The last time Utah addressed the gas tax was in 2023. Utah lawmakers voted to decrease it by about 2 cents per gallon in response to inflation, but they added a tax for electric vehicle charging to make out-of-state EV drivers help pay for Utah roads.
Additionally, Utah’s EV drivers have to pay either a flat registration fee or pay per mile to make up for the lost gas tax revenue.
Other states are also changing the way they recoup lost gas tax revenue.
Despite tinkering with taxes and fees, Hesterman isn’t convinced that “we've elegantly found a way to accomplish that yet.”
“Politics are a big factor in what happens,” he said. “There's the what would make sense to do, versus what is reality and what can be done.”
Hesterman said that, broadly, the Taxpayers Association is in favor of the gas tax and other vehicle taxes and registration fees that fund roads because they are voluntary. To put it simply, if you don’t want to pay, don’t drive.
“If someone is driving from [Northern Utah] down to St. George for spring break, and they need to pull over and charge up the EV before they keep going, they should be paying something at the charging station, rather than the pump.”
