South Dakota hikes gas tax

South Dakota is increasing the amount of money drivers in their state will have to pay at the pump to help pay for transportation projects, the Associated Press reports. 

South Dakota Gov. Dennis Daugaard has signed legislation to increase the 22 cents-per-gallon gas tax in the Mount Rushmore State by six cents starting April 1, according to the report. 

The additional money for South Dakota road projects will be collected on top of an 18.4-cents-per-gallon federal gas tax that is charged to all drivers in the nation’s to fill the federal government’s transportation funding coffers. 

{mosads}The American Petroleum Institute says the gas tax increase will bring the total amount of money that drivers in South Dakota are charged at the pump to more than 46 cents per gallon. 

South Dakota is the latest in a series of states to increase their local gas tax in recent years as federal transportation funding has dried up. 

Lawmakers are currently facing a May 31 deadline for the expiration of federal transportation funding and they are struggling to come up with a way to pay for an extension of the measure. 

Transportation advocates in Washington have pointed to the willingness of Republican states like South Dakota to raise their own gas tax as evidence that a hike in the national levy would be politically palatable this year. 

Conservative groups in Washington have made clear that they would consider an increase in the federal fuel levy a tax hike, however.

The gas tax has been the main source of transportation funding for decades, but it has not been increased since 1993, sapping its buying power.

While the tax hike has backing from business associations and unions, opposition from conservative groups such as Heritage Action and the Club for Growth has caused GOP leaders in the House to suggest it is a non-starter.

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax will only bring in $34 billion annually without an increase.