Louisiana Should Use $273 Million in State Motor Vehicle Sales Taxes for Road Repairs

Treasurer Kennedy Says Put the Money in Parish Transportation Trust Fund

BATON ROUGE, LA – Louisiana should dedicate the $273 million collected each year in state vehicle sales taxes to pay for road repairs instead of allowing the money to flow into the General Fund to pay for general government expenses, according to State Treasurer John Kennedy.

“Louisiana families pay taxes every day, and half of the time they are not really sure where the money is going,” said Treasurer Kennedy. “The state motor vehicle sales tax is a perfect example. On a $25,000 car, you will pay around $1,000 in state vehicle sales taxes. Wouldn’t common sense dictate that the state used your hard-earned tax dollars for road repairs instead of placing the money in the General Fund for lawmakers to spend it as they wish?”

For the past 10 years, the state has collected an average of $273.2 million in state motor vehicle sales taxes and has placed the money in the General Fund to pay for various operating expenses. Treasurer Kennedy suggests putting the entire amount collected each year into the Parish Transportation Trust Fund instead. Monies in the fund would be allocated back to local parishes based on population and miles of roads, and local governments could use the funds to make necessary road repairs. Local governments could even bond out their share of the monies to generate a lump sum up front to pay for road repairs.

“We’re looking at a substantial budget surplus for this year and next,” said Treasurer Kennedy. “The General Fund does not need any more money, but our local parishes do. Many local governments have a harder time completing road projects because they do not have the necessary funds. We can help them make necessary road repairs by putting all state vehicle sales tax collections into trust. Infrastructure is one of the most pressing issues in our state, and the 4 percent sales tax on vehicles should be used for that purpose. Using the tax for road repairs would also create jobs. According to the Federal Highway Administration, using the $273 million for road repairs would create 12,968 jobs. (The FHA says that $1 billion in infrastructure improvements creates 47,500 jobs.)”
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