Panel Urges 50% Gas Tax IncreaseSubmitted by Sovereign Maersk on Fri, 01/02/2009 - 15:55
A 50 percent increase in gasoline and diesel fuel taxes is being urged by a federal commission to finance highway construction and repair until the government devises another way for motorists to pay for using public roads.
The National Commission on Surface Transportation Infrastructure Financing, a 15-member panel created by Congress, is the second group in a year to call for higher fuel taxes.
With motorists driving less and buying less fuel, the current 18.4 cents a gallon gas tax and 24.4 cents a gallon diesel tax fail to raise enough to keep pace with the cost of road, bridge and transit programs.
In a report expected in late January, members of the infrastructure financing commission say they will urge Congress to raise the gas tax by 10 cents a gallon and the diesel fuel tax by 12 to 15 cents a gallon. At the same time, the commission will recommend tying the fuel tax rates to inflation.
The commission will also recommend that states raise their fuel taxes and make greater use of toll roads and fees for rush-hour driving.
A tax increase on this order would be politically treacherous for Democratic leaders in Congress — a gas tax hike was one of the reasons they lost control of the House and Senate in the 1994 elections. President-elect Barack Obama has expressed concern about raising gas taxes in the current economic climate. But commission members said the government must find the money somewhere. "I'm not excited about a gas tax increase, but the reality is our current gas tax doesn't pay for upkeep of the system we have now," said Adrian Moore, vice president of the Reason Foundation, a libertarian think tank in Los Angeles, and a member of the highway revenue commission. "We can either let the roads go to hell or we can pay more."
The dilemma for Congress is that highway and transit programs are dependent for revenue on fuel taxes that are not sustainable. Many Americans are driving less and switching to more fuel-efficient cars and trucks, and a shift to new fuels and technologies like plug-in hybrid electric cars will further erode gasoline sales.
According to a draft of the financing commission's recommendations, the nation needs to move to a new system that taxes motorists according to how much they use roads. "Most if not all of the commissioners have a strong belief and commitment that we need a fundamental transformation of the current system," said commission chairman Robert Atkinson, president of the Information Technology and Innovation Foundation, a technology policy think tank in Washington.
A study by the Transportation Research Board of the National Academies estimated that the annual gap between revenues and the investment needed to improve highway and transit systems was about $105 billion in 2007, and will increase to $134 billion in 2017 under current trends.
Projected shortfalls in revenue led the National Surface Transportation Policy and Revenue Study Commission, in a report issued in January 2008, to call for an increase of as much as 40 cents a gallon in the gas tax, phased in over five years.