Stagnant Federal Gas Tax Lies At Heart Of Transportation Funding Crisis

Congress' reluctance to raise the gas tax, as well as the President's refusal to approve an increase, lies at the heart of the transportation funding crisis, affecting both roads and transit.

"The federal tax on a gallon of gas has not risen in 14 years and Congress is reluctant to increase it." Ironically, the transportation funding crisis is exacerbated by the high price of fuel and the increased usage of high-mileage vehicles, as less driving translates into fewer dollars pumped into the Federal Highway Trust Fund, as does more fuel-efficient driving."

"Of the 18.4 cents a gallon in federal excise taxes, about 15.44 cents goes to the highway trust fund, 2.86 cents to mass transit programs and one-tenth of a center to a leaking underground storage tank fund. The tax on diesel fuel is slightly higher."

"Gasoline was only 30 cents a gallon and the excise tax on it was just 3 cents in 1956 when Congress created the highway trust fund. As gasoline prices rose, so did the tax. But a tax-adverse Congress has kept it at 18.4 cents a gallon since 1993, when gasoline prices were about $1.10 a gallon."

"Two years ago, lawmakers proposed a 4-cent-per gallon boost in the fuel tax to finance a $375 billion highway bill. They backed off when President Bush pledged to veto any road legislation with a tax increase. In the end, the spending plan came to $286 billion."

"The Congressional Budget Office predicts the fund will run a deficit of $1.7 billion at the end of 2009 and $8.1 billion by the end of 2010, when the current highway program expires and Congress will write a new one."

"A drastic cut in federal highway and transit funding will result unless Congress steps in," John Horsley, executive director of the American Association of State Highway and Transportation Officials, said in a report.

Horsley's group said the fuel tax would have to be increased by 10 cents per gallon through 2015 to restore the purchasing power of the program."

"In the long run we've either got to admit we are going to underinvest and accept more gridlock and congestion" or find new revenue sources, said Rep. Peter DeFazio, chairman of the House Transportation and Infrastructure subcommittee on highways and transit.

"What is clear to him is that raising taxes of any kind for the highway trust fund is possible only if people are convinced that more spending will mean less congestion, safer roads and a cleaner environment."

Thanks to MTC-ABAG library

Full Story: With federal funds drying up, states raise road money; Cash that usually comes from gasoline tax being replaced by toll roads, state taxes


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