In the United States, transportation finance has become a critical issue at the federal, state, and local levels as vehicles have become increasingly fuel efficient and gasoline taxes have lagged behind both in inflation-adjusted rates and in revenues sufficient to fund America’s highway system. In response to the declining financial resources for transportation infrastructure, local governments are searching for new revenue sources to fund their transportation needs. One option available in many states is to adopt local option transportation taxes. In general, local option transportation taxes are new tax options that are either authorized at the state level or approved by local voters and levied at the county or municipal level for transportation-related purposes.
This study examines the time to adoption of county local option transportation fuel taxes (LOFTs) in Florida from 1972 to 2015. Florida county governments are authorized to levy up to 12 cents of LOFTs in the forms of three separate levies. The first LOFT is the ninth-cent fuel tax, which was authorized in 1972. It the only LOFT available to county governments until 1983 when the second of LOFT (1-6 cents) was permitted in 1983. The third LOFT (1-5 cents) was introduced in 1993. Using a Cox proportional hazard model, this study finds that proximity to a major interstate highway (tax exporting), a larger population size, higher levels of fiscal stress (decline in property tax base), and horizontal tax competition affect time to adoption. Additionally, there is evidence that the legal structure both impacts the time to adoption and the other factors estimated to effect time to adoption.