Since the 1930s, the federal tax on gasoline has been the single greatest source of revenue to pay for America's highways and mass transit. For every gallon sold, 18.4 cents is collected by the federal government and set aside in the Highway Trust Fund to build and maintain roads, bridges, subways, light rail and other transportation-related projects.
The tax was last raised in 1993. So while the price of a gallon of gasoline has more than tripled from approximately $1.10 for a gallon of regular unleaded 21 years ago to the current $3.63, the federal government's share has remained that same 18.4 cents that it was back when cutting edge personal technology meant you owned a Walkman and a VCR.
The result has been to create a deficit — not only a budgetary one but one of transportation infrastructure — that will leave the next generation with worse traffic congestion, greater travel costs and an economy handicapped into the future. That last possibility should be of even greater concern than the warning the White House issued this week that the Highway Trust Fund is about to go broke if Congress doesn't come up with at least $18 billion by August.
Congress has faced short-term crises in the trust fund before and has usually come up with some Band-Aid in the form of taxpayer bailouts. Over the last half-decade, more than $50 billion has been added to the fund to supplement the shortfall from transportation-related revenues (which, in addition to the gas tax, include a tax on diesel fuel and various levies on truck tires and the like).
But that defeats the purpose of the trust fund, which was created in 1956 to make transportation self-sufficient, sustainable and apart from other types of federal spending. The gas tax represents an uncommonly efficient user fee — the more cars and trucks drive on the roads and the more gasoline they burn, the more they pay for transportation improvements including transit systems that keep cars off the roads.
Had the gas tax simply been pegged to inflation, it would be at least 30 cents today. Had the 1993 ratio of 6-to-1 between the cost of gasoline and the amount of tax paid been maintained, it would be more than 55 cents per gallon now. And had it been adjusted to account for the more fuel-efficient cars of today (which use less gasoline and thus pay less in taxes but cause just as much strain on the transportation network), it would be higher still.
Pick a number — 30 cents, 55 cents or anything in between — but it's time the U.S. went back to user fee-driven transportation spending and stopped relying on general taxpayers to backfill the account. The nation's transportation needs are enormous — even the Obama administration's proposed $302 billion, six-year plan is considered much too small by experts. And it depends on raising $150 billion from corporate tax reform that House Republicans are certain to oppose.
We recognize that a gas tax increase is a political non-starter in an election year, but the trouble is there doesn't seem to be any kind of year when Congress is willing to face facts and develop a workable, long-range plan for transportation. But Washington ought to be more concerned about the consequences of neglecting the nation's transportation infrastructure and the eventual cost of that failure to the gross domestic product.
Does a gradual increase in the gas tax kill jobs? Not in Maryland. Last year, the state's gasoline tax rose 3.5 cents per gallon with more increases on the way, yet the state's economic circumstances have continued to improve, the jobless rate shrinking from 6.8 percent last July when the higher gas tax went into effect to 5.9 percent in March. Nor does it make the state less competitive — the average gasoline price in Maryland has remained at or below the national average.
That's one reason why a higher federal gas tax already has the support of the U.S. Chamber of Commerce. Business leaders recognize what's at stake if nothing is done. An $18 billion supplemental appropriation might avert a crisis this summer, but it's no solution, and it certainly doesn't put the U.S. back on a sustainable approach to keeping the transportation system in decent repair and the economy protected.
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