Study ranks Ohio fourth in the nation for responsible road funding amid looming challenges

Recently released data from the Tax Foundation highlights the uneven ability of states to cover highway spending through dedicated road-user revenues such as gas taxes, vehicle fees, and tolls.

In its 2026 analysis of road taxes and funding, the Tax Foundation notes that most states fall short of fully funding their highway programs with these sources alone. Only a handful of states, including Ohio, generate enough user-based revenue to cover expenditures, while other states rely heavily on general funds or other sources, shifting costs to non-drivers.

Ohio, ranking fourth, maintains a relatively strong user-pay approach, funding 93.7% of the transportation budget through its dedicated motor fuel taxes and fees. Fuel taxes, however, are under pressure nationwide.

The core problem stems from advancing fuel efficiency standards and the rapid growth of electric vehicles.

Traditional gas and diesel taxes were originally designed to fund roads using a per-gallon user fee: the more gallons sold, the more money states had to fund road maintenance and infrastructure. Yet the days of 15-mpg Crown Victorias are long gone, as new vehicles achieve higher miles per gallon and EV technology eliminates fuel consumption—at least at the pump.

This transformation of the transportation sector has left lawmakers in quite a pickle as revenue per mile driven continues to decline, while vehicle miles traveled have steadily increased. More concerning, the Tax Foundation notes that the rate of inflation has further eroded the real value of fixed tax rates, creating structural shortfalls that either force states to skip road maintenance or dip into general funds, passing costs onto those who do not drive.

However, Ohio has been proactive in exploring alternative options, and true to form, its forward-looking lawmakers are already working to get ahead of these nationwide challenges.

Participating in the Eastern Transportation Coalition’s 2018-2019 multi-state pilot, Ohio tested a mileage-based user fee, gathering data on feasibility, out-of-state travel, and trucking industry impacts with a cautious eye toward privacy concerns.

Following the pilot’s results, lawmakers opted for a fuel tax increase, addressing near-term needs rather than implementing the invasive surveillance technology required for a flat Vehicle Mileage Tax. Last year, however, Buckeye lawmakers passed House Bill 54, an $11 billion transportation package that shifted the state’s focus to road maintenance and preservation without raising fuel taxes.

“If there is one thing people pay attention to, it’s the price at the pump, and that includes the gas tax,” John Fortney, spokesperson for Ohio Senate Republicans, told Ohio.News.

“The most recent transportation budget contained zero tax increases on gas or diesel because our members recognize that hard-working moms and dads shouldn’t have to worry about whether that last quarter tank gets them to payday because they’re getting gouged by a gas tax.”

He added that the budget is forward-looking in part because it funds most of the Ohio Highway Patrol, easing pressure on the general operating budget, while noting that future budgets will need to adapt as EV and hybrid adoption reduces traditional pump revenue. The biennial process, he said, allows changes “to better reflect driving and transportation trends.”​

That forward-looking policy approach has made a significant difference for Ohio’s drivers.

Comparatively, California, which ranks 11th in the nation for funding 80% of its $30.9 billion transportation budget, has a nearly identical fuel tax rate per gallon as Ohio. Yet, additional fees at the pump push California’s fuel tax to 90 cents per gallon, resulting in average statewide costs of $5.89 per gallon compared to Ohio’s $3.78 per gallon.

Yet, only 50% of California’s user revenues come from fuel, as 30% is supplemented heavily by high vehicle registration and weight fees, while the remaining 20% of California’s road spending comes from its general funds, or additional non-user revenues. In fact, California’s challenges have become so “radioactive” in recent years that even studying the issue has become contentious.

Fortunately, cooler heads prevail in the Buckeye state. Greg Lawson, a policy fellow of the Buckeye Institute, offered Ohio.News a measured view of the longer horizon.

Lawson, praising Ohio’s reliance on dedicated gas tax revenue as “commendable,” cuts to the chase.

“However, EVs and rising fuel efficiency are quietly hollowing out the gas tax. Over the long term, a mileage-based user fee is the only durable replacement. What exactly that looks like is not entirely clear, but conversations need to happen sooner rather than later in order to be prepared.”

As Ohio lawmakers look ahead, the least invasive yet promising direction appears to be simple odometer-based mileage reporting at annual registration or safety inspections, combined with weight adjustments for heavier vehicles, such as trucks and battery-equipped EVs.

Think tanks, such as the Tax Foundation and the James Madison Institute, indicate that this low-tech approach could help address the decline in fuel usage while avoiding constant GPS tracking and geolocation data, directly addressing the privacy concerns raised by Ohio lawmakers and groups like the Buckeye Institute. Pilot programs, on an opt-in basis, continue to demonstrate that the model effectively preserves the user-pay principle without unnecessary government intrusion.