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State transportation funding strained as motor‑fuels tax rate unchanged since 2003, KDOT says
Summary
Kansas Department of Transportation officials told the committee that motor‑fuels tax rates have been flat since 2003 while vehicle miles traveled grew and vehicle fuel efficiency improved, shrinking motor‑fuels tax purchasing power and shifting more costs to sales‑tax and federal funds.
Kansas Department of Transportation officials told the Special Committee on Taxation that the state’s motor‑fuels excise tax rate has not changed since 2003 and that changing travel patterns and vehicle fuel efficiency have reduced the tax’s buying power.
Secretary Reid of KDOT said roughly one‑third of motor‑fuels tax revenue is allocated to the special city and county highway fund, which cities and counties rely upon for road and bridge work. He explained that gasoline volumes have been largely flat over two decades while diesel usage rose modestly — and that average vehicle fuel efficiency has improved substantially, which reduces per‑mile fuel purchases and thus excise tax receipts.
Why it matters: KDOT and local governments depend on motor‑fuels tax receipts to fund infrastructure; with construction and material costs rising faster than motor‑fuels receipts, Secretary Reid said the state has relied more on sales taxes and federal reimbursements to fill the gap.
Key points presented - Rates and trend: State gasoline and diesel rates were set in 2003 (gasoline at 24¢/gallon), and federal fuel taxes have been unchanged since 1993. KDOT compared fuel‑sales gallons and vehicle‑miles‑traveled (VMT) and found gasoline gallons roughly flat since 2003 and diesel up ~20% over that period. - VMT and fuel efficiency: KDOT reported a modest VMT increase over 20 years but larger gains in vehicle fuel efficiency for new light vehicles, reducing fuel demand per mile. The presentation noted average fuel efficiency for new light vehicles rose roughly 37% from 2003 to 2023. - Purchasing power and costs: National FHWA data show highway construction costs roughly 3.25 times 2003 levels; KDOT staff said the motor‑fuels tax’s share of state highway fund revenue has declined from about 37% in 2003 to about 22% in 2025. KDOT now relies more on a portion of sales tax and rising federal funds to cover the difference. - Local impacts and EV registration fees: KDOT described the special city and county highway fund formula (statute‑based distribution: ~43% to cities, 57% to counties) and noted House Bill 2122 (2025) redirected part of EV and hybrid registration fees to the same fund. KDOT presented Linn County as an example where static receipts once would have paid a small bridge; today they cover roughly half a bridge replacement cost.
Committee questions and follow‑up: Members pressed for whether bridges were included in the city/county apportionment (KDOT said no, statutory formula does not weight by bridges) and about the mechanics of IFTA for interstate carriers (an IFTA official explained carriers file quarterly in their base state and allocations are settled among states).
Ending: KDOT urged the committee to consider the long‑term gap between construction cost inflation and motor‑fuel receipts and flagged EV registration fee routing as a recent legislative action that will modestly augment local highway funds.
