On July 1, 2023, Minnesota’s gas tax of 28.6 cents a gallon was lower than in 30 other states, according to the Tax Foundation, as Figure 1 shows.
Figure 1
By July this year, our state’s gas tax was up to 32.7 cents a gallon — an increase of 14.3% — which ranked below just 20 other states, as Figure 2 shows.
Figure 2
As Figure 3 shows, while 16 states held their gas tax constant between 2023 and 2026 and another 11 saw it decline, Minnesota’s hike was the 9th highest in the United States. This has been another source of the squeeze on affordability suffered by Minnesotans in recent years.
Figure 3: Change in gas tax, cents per gallon, 2023 to 2026
This hike in Minnesota’s gas tax was passed into law by the “historic” DFL trifecta in 2023 when it was indexed “to inflation as reflected in Minnesota Highway Construction Cost Index beginning Jan. 1, 2024. No year-over-year percentage change may exceed 3%.” This is not bad policy in itself; if the cost of providing something goes up more money will be required to provide it, though you could argue that this is something the legislature should do.
The trouble is that this tax hike comes on top of all the others; sales taxes, property taxes, tab fees, the list just goes on. One of the major sources of the squeeze on affordability in Minnesota in the last few years has been the state government’s insatiable desire for its citizen’s cash.