>WSJ on gas tax revenue

>This Wall Street Journal Article states that the House passed a bill to transfer $8B from the general fund to the highway fund. People are driving more fuel-efficient cars, and driving them less, while inflation has eaten away at the value of the per-gallon federal tax on gasoline (18.3 cents per gallon). The federal gas tax has been the same since 1993, when it was about 17% of the price of a gallon of gas. All states add a gas tax between 8 and 56 cents (Alaska and California, respectively).

If the 1993 gas tax had kept up with inflation, it would be around 27 cents today, or an increase of 9 cents. Instead of pursuing a change to the gas tax, the House approved spending general revenues to make up the shortfall.

Remember this next time someone tries to argue that cars pay their own way with gas taxes. The highway fund was short, and rather than raise gas taxes, tolls, or fees on drivers, the House transferred money (deficit spending!) to make up the difference.

I think the best quote from the article came from the Bush Administration’s response:

The White House has threatened to veto the measure, objecting that the $8 billion would come from the general fund. The White House called the bill “a gimmick and a dangerous precedent that shifts costs from users to taxpayers at large.”

Ok, I’m with you. Deficit spending is bad, and users should pay for the costs of building and maintaining roads. Got it. Please continue:

The administration has proposed covering the trust fund shortfall by shifting money out of a mass transit account.

Wait, what? There’s not enough money for highways, so let’s pay for it by shorting the small portion of gas tax revenues that fund mass transit?
Maybe if the DOT hadn’t been going out of its way to deny funding to new transit starts or pressuring cities to choose less capable BRT over light rail, the funds wouldn’t be available in the mass transit account to raid.

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About perkinsms

I'm an engineer and father interested in transit, parking and economics.
This entry was posted in budget, economics, gas, government, politics, spending, tax. Bookmark the permalink.

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