Gas Tax Hike a No-Go
WASHINGTON - Once again, businesses, unions and lawmakers have concluded the gas tax should be raised to pay for improving the nation's deteriorating and increasingly crowded highway and transit systems.
Once again, there's not much chance Congress will go along.
The House Transportation and Infrastructure Committee is considering a six-year, $500 billion bill - $450 billion for highways and transit, and $50 billion for high-speed rail - that its members say is necessary to help the economy recover.
"General Mills in Minnesota loses $2 million for every mile an hour their trucks travel below the speed limit because they have to pay overtime charges and late delivery fees," said Rep. James Oberstar, D-Minn., who chairs the committee. "That's not the kind of transportation we need in America to keep this economy moving, to keep our society mobile. We need a robust investment."
The current six-year transportation bill, which expires Wednesday, cost $286 billion and was funded primarily by the federal 18.4-cent tax on every gallon of fuel. Unable to agree on a new bill, Congress plans to extend the existing legislation for the foreseeable future.
If nothing changes, states would get about $325 billion over the next six years for highways and transit projects, according to the Federal Highway Administration. Reaching the $450 billion target would probably take around a 10-cent increase in the tax, said Greg Cohen, president of the American Highway Users Alliance.
There seems little chance of that, given President Barack Obama's opposition to the idea and a reluctance among congressional leaders to consider increasing a tax that's remained the same since 1993.
"Let's face it, the American people, right now especially, cannot afford an increase in the gas tax," Rep. Eric Cantor, R-Va., said on the House floor last week. "Such a tax would hit the unemployed, would hit small businesses, would hit those least able to afford it, the hardest."
Despite the opposition by Cantor and other Republican leaders, the head of the U.S. Chamber of Commerce, a traditional GOP ally, supports raising the gas tax. But there's little appetite in Congress for doing so when lawmakers have to face the voters again in November 2010.
"Our research shows that the average person is willing to support a gas tax increase for highways," Cohen said. "But in the polarized atmosphere, people are afraid that their vote will hurt them in a hyper-political environment."
Opposition to raising the gas tax has prompted some to look at other ways to get revenue, such as issuing bonds, raising other fuel-related fees, or even a tax on transit fares. But there's uncertainty over how those ideas would be received and how well they would work.
The need is increasingly dire.
Commuters collectively logged 4.2 billion hours stuck in traffic in 2007, nearly one full work week per traveler, according to the Texas Transportation Institute, which tracks traffic patterns in 439 urban areas. The overall cost in wasted fuel and lost productivity reached $87.2 billion - more than $750 for every traveler. And the total amount of wasted fuel topped 2.8 billion gallons - three weeks' worth of gas for every traveler.