Legislation

2021 Legislative Session

FACERS has proposed the following legislation for the 2021 Legislative Session.

Indexing Local Gas Taxes

FACERS encourages legislation to index local gas taxes to the Consumer Price Index in the same way State gas taxes are determined.

The Fuel sales tax was 6.9 cents/ gallon in 1997 and had risen to 14.3 cents per gallon in 2020 (it increased to 14.5 cents per gallon in 2021) . The State Comprehensive Enhanced Transportation System Levy was originally a maximum of 4 cents per gallon and had risen to a maximum of 7.9 cents per gallon in 2020 ( 8 cents per gallon in 2021).

Background

The motor fuel taxes are the principle source of funding for the construction, maintenance, and operation for most of Florida’s local agencies. The costs of transportation system construction and operation are linked to the costs of goods and services, which continues to rise. As the costs of goods and services – measured by the Consumer Price Index- continue to rise, the buying power from there revenue generated from motor fuel taxes will continue to decrease.

Sec. 206.41(f) and (g) allows for the State Comprehensive Enhanced Transportation System Tax and the FDOT portion of the “fuel sales tax” to be indexed to the Consumer Price Index. The local share of the “fuel sales tax” and the fuel taxes authorized to be levied by counties, (contained in Sec. 206.41(1)(a)-(f) and Sec. 206.60) are not indexed. Since the annual adjustment of the state share of the fuel tax is determined by changes in the CPI, the tax increases do not require further legislation.
FACERS1

Figure 1 - 2020 Motor Fuel Taxes in Florida

Figure 1 shows the motor fuel taxes authorized in Florida for 2020. This figure shows the maximum local option taxes permitted recognizing that not all counties have levied the maximum local option. County by county details are available here.

Florida’s local governments play an integral role in funding Florida’s local, regional, and state transportation system and that system will see increasing deterioration if this vital funding source is not reinforced.

In aligning the state and counties with the same indexing system, it would allow counties to strategically fund projects from revenue generated within their county thus allowing for a more targeted control of maintenance, development and investment. According to the FDOT website, “The department (FDOT) received about $690 million additional revenue in fiscal year 2015-16 when compared to what collections would have been without fuel tax indexing.” If aligned, counties would likewise see a funding increase.

Fiscal Impact:

Figure 2 from FDOT’s 2017 version of Florida’s Transportation Tax Sources: A Primer shows the relative increase in historical fuel taxes by entity and shows the rate at which the rate would have increased: