Certain states have had to scramble to restructure their gas taxes as gas prices have dropped—and kept dropping—lest transportation funds hit empty.
Daniel C. Vock reports on the "handful of states that tax gasoline based on its price -- rather than the volume of gas sold," which were making raking in the revenue back when the price of gas was astronomical. "But now that the national average is $2.01 per gallon," writes Vock, "states like Kentucky, North Carolina and Virginia are in a financial bind."
Vock takes Virginia as his first example, which recently estimated that "low gas prices could deplete the state's $5.4 billion transportation funding package by $530 million through 2019." The state reacted by setting a new minimum for how low its gas taxes can go. According to Vock, "No matter how cheap gas gets, it will be taxed as if the price is $3.11 a gallon."
The article includes more detail, including examples from Kentucky and North Carolina, about the impact of volatile gas prices on the fiscal health of states.
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