Al Drago/Getty Images For decades states have used gas taxes to fund road repairs. But only sort of. Most states charge for each gallon purchased, not per dollar spent, which, with cars getting more fuel-efficient (and EVs eating into the purchase of gas), means gas taxes aren't keeping up with the ever-increasing costs of road repairs. The logic of taxing diesel more than for gas is based on the notion that diesel is largely used by heavier vehicles, especially trucks, which cause more roadway damage than lighter-weight cars. States that tax significantly more for diesel include California and Connecticut. The federal government tags diesel with a much higher per-gallon fee, too. Most states have thrown in the towel on fully funding road repairs via gas taxes, and simply cannot tax any fuel enough to keep up with rising infrastructure costs, according to the Pew Research Center. In response, states like Michigan are using money from their general fund as well as taxes on other items, like cannabis, to make up the shortfall. Speaking of cannabis, the state with the most stoner-brained ideas on how to tax fuel — diesel and gas — is California. It explicitly taxes diesel more because of its carbon output, in an effort to have suppliers clean up the fuel over time. Or so Sacramento says. The problem, besides the onerous burden California puts on taxpayers, is that the scheme is less green than it might seem. At the other end of the fuel-tax spectrum is Kentucky. There, gas is taxed at 15 cents a gallon, diesel at 12 cents. Instead of focusing on fuel, Kentucky adds a surtax on trucks' miles driven, while those over 26,000 pounds pay an added fee, regardless of fuel — which could prove advantageous when there are more EVs and electric long-haul trucks. The Golden State tries to make diesel clean Sand555/Getty Images California's approach is far more bent on reducing pollution. California piles a ton of taxes and fees onto all fuels, which is how you get to 61.5 cents per gallon of gas, and $1.13 on diesel. That gas tariff nearly doubles the national average, and it's more than three times the nation's per-state diesel tax. Plus there's an excise tax of 61 cents on gasoline and 47 cents on diesel, assessed on wholesalers, not retail customers. But like President Donald Trump's tariffs, these still are paid by consumers in the end. (As of 2023, 42% of the gas excise tax and 16% of the diesel tax goes toward funding local government. A silver lining, maybe? But keep reading, because that means California isn't doing so hot when it comes to funding the state's roads.) Why are California gas taxes so high? The state's famously independent California Air Resources Board (CARB) created its own fuels standard more than a decade ago. The regulations require the reduction of emissions from transportation, which has led to more expensive gas and diesel formulations, and that mix keeps adding more and more biofuels, derived from agriculture, not fossil fuels. Californians use less-icky gas. Maybe? Tricky_Shark/Shutterstock As of 2023, CARB's reformulated fuels scheme swapped 25 billion gallons of petroleum fuel for biofuels. The state says over 50% of diesel is now biomass-based rather than from fossil fuels. However, there's a fly in that oily soup. Industry watchers have poked holes in CARB's math, suggesting that, for one thing, the diversion of crops for fuel drives up the cost of food. Further, they point out that CARB's math doesn't account for deforestation caused by increased demand for biofuels, which they say accounts for 10% of total global warming emissions. The Union of Concerned Scientists didn't hold back in 2024 when it said that while CARB was patting itself on the back over biofuels, "there are few if any real climate or air quality benefits associated with unlimited use of vegetable oil-based fuels and there are enormous harms." Further, the Environmental Protection Agency already mandates the production of crop-derived gas and diesel nationally. A University of Pennsylvania study points out that California's law has simply led to that state sucking up more of that fuel, but it just as easily could've been consumed by a Miata dude in Dallas or an F-150 bro in Florida. And, you bet, Californians pay more for that privilege. But the Penn study says doing so doesn't redound to an overall reduction in national greenhouse gases, just those produced in California. Well, at least the roads are better, right? Um, right? Mikhail Yakovlev/Getty Images One benefit to Californians is that their fuel taxes buck the national trend of underfunding road repairs and mass transit through gas taxes. California's 2017 Road Repair and Accountability Act increased fuel taxes on diesel as well as gasoline to improve road upkeep. Today California is unusual in the U.S., funding about 80% of road fixes through its fees on fuel, while only Maryland and New Jersey fund road maintenance solely through gas taxes. Yeah, New Jersey, a state that's definitely famous for the great condition of its tarmac. Well, if you live in the Garden State, you know what? Do a little dance. Because a recent study by Lending Tree shows that, per mile, New Jersey merely has the fifth worst roads in the nation. Rhode Island came dead last, and California gets the penultimate dunce cap. Hey, don't blame us. We're just the messenger. What's worse than paying high gas taxes and still having awful roads? According to AAA, the average car repair caused by pothole damage runs $600, and 10% of all drivers have to seek fixes caused by cruddy roads, costing over $26 billion in 2021. Okay, but why is diesel so pricey, period? Dmitri Toms/Getty Images Whatever you think of California's efforts with crop-derived diesel, the petroleum-based fuel is less toxic than it once was, and according to the Environmental Protection Agency, the human health benefits delivered a tenfold return versus the costs. However, cleaner diesel is more expensive, refiners cannot switch between refining gas and refining diesel without expense, and it's not a fast swap. Plus, U.S. refiners export a lot of diesel rather than sell it domestically. Also, 10% of the global supply comes from the Middle East, and that fuel isn't getting out of the Strait of Hormuz, pushing up prices internationally. And, yep, you're impacted even if your car runs on gas, because just about everything we consume, from food to construction material, bears the brunt of skyrocketing diesel since all these goods travel by train and truck. President Trump has teased a gas tax holiday, but you know what's super fun? Even cutting that would likely amount to only some of the dough actually going back into your wallet. A Penn-Wharton study suggests a rebate of about 13.2 cents (72%) on gas and 14.6 cents (60%) on diesel. Why? Because you need gas. Just like you need food. Which in economics is known as inelastic demand. So the Penn-Wharton's study authors say that the suppliers of gas would naturally take a piece back from this governmental largesse, pocketing a bunch of the change as profit. Who loses? Us! See that above bit about potholes. Hey, it could be worse. You could live in California!