Fifty-five percent of road spending in Louisiana is funded with user taxes, according to data from fiscal year 2018 that was recently published by the Tax Foundation.
Louisiana ranks 36th in the U.S. in terms of the share of state and local road spending that is covered by tolls, user fees and user taxes. It’s also among 46 states, as well as Washington, D.C., that don’t raise enough revenue to cover their highway spending. Most states contribute revenue from other sources to make up differences between infrastructure revenue and expenditures.
Traditionally, revenue dedicated to infrastructure spending has been raised through taxes on motor fuel, license fees and tolls, but revenue from motor fuel has proved less effective over the last few decades.
In fiscal year 2018, Louisiana generated more than $768 million in state infrastructure revenue. Of that amount, 82% came from motor fuel tax revenue, 11% came from license revenue, and 7% came from tolls and charges.
The state share of highway spending totaled nearly $1.4 billion, including 55% of which was funded with these transportation taxes, licenses and fees.
For comparison, Texas taxpayers pay for more than 74% of their infrastructure spending, while Florida users pay for 79.3%. Only four states—California, Indiana, Montana and Tennessee—raise enough revenue to cover their highway spending.
Though politically unpopular, motor fuel taxes, license fees and tolls are all relatively good applications of the benefit principle—the idea that the people paying the taxes and fees should be the ones to benefit from them. However, with the sustainability of established motor fuel taxes increasingly threatened, state and federal lawmakers are considering other options for transportation revenue.