Minnesota's gas tax collections fall, but a hike is coming
Add Axios as your preferred source to
see more of our stories on Google.
Minnesota's gas taxes make up a smaller share of the state's total government revenue, according to new data from the U.S. Census Bureau.
Why it matters: The taxes are used exclusively to pay for roads and bridges, but the amount collected has been declining in recent years due in part to the rise in electric vehicles and more fuel-efficient hybrids on state roads.
By the numbers: The state collected $873 million in gas taxes in 2023, down from $937 million in 2019.
Reality check: Simultaneously, overall state government revenue has been steadily climbing.
State of play: Minnesota's gas tax of 28.5 cents a gallon ranks in the middle of the pack for U.S. states.
Yes, but: In 2023, Minnesota Democrats passed a transportation bill that ties the tax to the state's construction cost index.
- On Aug. 1, the Department of Revenue will announce the size of the first increase since the law passed. The new rate will begin on Jan. 1. Annual hikes will be capped at 3%.
- At the time the bill passed, state officials estimated it would increase revenue by $109 million in the first full fiscal year after implementation.
The other side: Republicans slammed Democrats for raising the gas tax at a time when the state had a $17.5 billion surplus.