Mississippi to Hike Motor Fuel Taxes for First Time in 38 Years

Mississippi Governor Tate Reeves has signed legislation to introduce annual increases in gas and diesel excise taxes, beginning on July 1. This move is part of a broader tax reform package that also eliminates the state income tax. The current motor fuel tax is set at 18 cents per gallon and will rise by 3 cents annually over the next several years, reaching 27 cents by July 2027. The Mississippi Trucking Association has noted the necessity of these tax increases due to the lack of adjustments since 1987, which has left the state with one of the lowest fuel taxes in the country. The funds generated from this tax increase will primarily support transportation infrastructure, allocating 74% to the state transportation department and additional percentages to county road construction and a strategic fund for multimodal investments.

The Governor's initiative, branded as the "Build Up Mississippi Act," is being touted as a significant step in enhancing the state’s competitiveness by removing income taxes while simultaneously addressing infrastructure funding through a structured approach to fuel taxation. From a transportation expert's perspective, this plan could provide much-needed resources to address longstanding infrastructure deficits in Mississippi. Increasing fuel taxes is often a necessary strategy to ensure roads and bridges remain safe and adequate for growing populations and freight demands. By tying these increases to long-term infrastructure investment, the state may improve both the safety and efficiency of its transportation network, which is crucial for supporting economic growth.