With Fuel Tax Revenue Down, States Look to Fund Roads

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PORTLAND, Ore. — The pothole outside Timothy Taylor’s home was so deep, he could hear the clunk of cars hitting it from inside his house.

The Portland resident could sympathize with those drivers: He knew to avoid his own neighborhood pothole, but another one damaged his car’s suspension to the tune of $1,000.

“Hearing that awful sound of your car bottoming out — it’s horrible,” he said.

Oregon transportation officials say that without more funding, residents like Taylor could see further declines in the quality of roads, highways and bridges starting this year. But revenue from gas taxes paid by drivers at the pump are projected to decrease as more people adopt electric and fuel-efficient cars, forcing officials to look for new ways to fund transportation infrastructure.

Timothy Taylor points out potholes outside his home in Portland, Ore. (Jenny Kane/AP)

States with aggressive climate goals like Oregon are facing a conundrum: EVs can help reduce emissions in the transportation sector, the nation’s largest source of greenhouse gas emissions, but they also mean less gas tax revenue in government coffers.

“We now find ourselves right now in a position where we want to address fuel use and drive down reliance on gases and internal combustion engines. But we need the funds to operate our roads that EVs need to use as well,” said Carra Sahler, director of the Green Energy Institute at Lewis & Clark Law School.

Motor fuel taxes are the largest source of transportation revenue for states, according to the National Association of Budget Officers’ most recent report on state expenditures. But the money they bring in has fallen: Gas taxes raised 41% of