When Missouri last increased the state fuel tax, in 1996, from 15-cents to 17-cents, the US average total price of a gallon of gasoline was roughly $1.084. The oldest records I could find for Missouri go back to 2003, but our are always less than the national average.
Assuming $1.07 per gallon in 1996, the 17-cent Missouri tax represents 15.89% of the price paid at the pump. In July 2008 Missouri gas prices peaked at $3.96, the state fuel tax representing only 4.29% of the total price paid. Recently Missouri’s average was $3.28/gallon, the fuel tax representing 5.18% of the total price per gallon.
How much would gas cost today if Missouri’s fuel tax was 15.89% of the total? To answer this we must do a series of calculations:
$3.28 – $0.17 = $3.11 (cost before Missouri tax)
1 – 0.1589 = .8411 (cost before Missouri tax = 84.11 % of total)
$3.11 / 0.8411 = $3.6975 or $3.70 (current cost if Missouri tax is 15.89% of total)
$3.70 – $3.11 = $0.59 (Missouri gas tax if 15.89% of total)
So there you have it, a gallon would cost $3.70 and the Missouri tax would be 59-cents. At 17-cents we’re only collecting 28.8% of the funding we did in 1996, relative to the total cost of a gallon of gas. To get to 59-cents we’d need to raise the ta
In 1996 the average fuel economy of a new car was 28.5 mpg. Driven 15,000 miles per year the driver would buy 526.3 gallons of gas for a total cost, ignoring fluctuations in price, of $568.40. Of this, Missouri would’ve received $89.47. The average fuel economy for a 2013 model car is 36 mpg, a substantial improvement. Driven 15,000 miles per year the driver would buy 416.7 gallons of gas for a total cost, ignoring fluctuations in price, of $1,366.78. Of this, Missouri would’ve received $70.84. Eighteen years later the driver spends 140% more on fuel, but Missouri receives less. Of course, with inflation the cost to maintain roads & bridges is higher nearly two decades later.
As I’ve said previously, if we’d continue to raise the fuel tax 2-cents ever two years, like we did 1992-1996, we’d now be at 34-cents. Our bridges & roads would’ve been funded and maintained all along.
If our state tax was suddenly doubled from 17-cents to 34-cents the total price of a gallon would be $3.45, instead of the current $3.28. The 34-cent tax would be 9.855% of the total cost of a gallon. Not as much as in 1996, but much better than today. Diesel fuel taxes need to be raised in a similar manner.
In the same example as above the driver of the 2013 car would still need 416.7 gallons, but now the total cost would be $1,437.62. Missouri would receive $141.68 from this motorist to maintain the bridges & highways.
The question now is how quickly can/should we raise the fuel taxes?
— Steve Patterson