April 12, 2015
The federal tax on gasoline hasn’t been raised since 1993, Bill Clinton’s first year as president. And, because Americans are driving more fuel-efficient vehicles and actually driving less, they are using less gasoline. And that means even less revenue is being generated by the gasoline tax.
The double whammy is taking a toll on the Highway Trust Fund, which relies on federal gasoline tax revenues as a self-sustaining mechanism to fund the interstate highway system. The U.S. Department of Transportation is predicting that the fund will no longer be able to meet its obligations by mid-summer. A $160 billion deficit is projected over the next decade.
Temporary fixes, including federal funding transfers that have kept the fund afloat for the past six years, are not enough. A permanent means of solvency must be found.
The federal gas tax now stands at 18.4 cents per gallon. A bipartisan proposal in the Senate urges a 12-cent hike. There also has been talk of increasing Ohio’s gasoline tax, which is now 28 cents per gallon.
Raising the tax on gasoline is not a politically popular idea, and it’s not surprising that legislators at the state and federal level shunned talk of it when motorists were paying close to $4 per gallon at the pumps.
But gasoline prices have dropped substantially in the past year — to less than $2 per gallon just a few months ago — and they’re expected to remain relatively low. Now is the time to consider a modest increase in the gasoline tax, which generates funding for road work not only at the federal level, but for state and local sources as well.
The federal interstate highway system, a legacy of the Eisenhower administration dating to the 1950s, is a vital transportation network that must be maintained. The Highway Trust Fund’s revenue shortfall cannot be ignored. (Until 1993, Congress regularly increased the federal gas tax, which initially was 3 cents per gallon. Adjusted for inflation, it would be 30 cents per gallon now.)
The Akron Metropolitan Area Transportation Study, which oversees major infrastructure projects in the Akron area, is calling for a 10-cent increase in the federal gas tax as well as consideration of a boost in the state tax, which would benefit state and local road work. AMATS notes that increased development in the Akron area has included more roads and highways, which must be maintained.
Nobody wants to see taxes increase, but the revenues generated by gasoline taxes actually are user-generated fees that are utilized for roads. If modest increases in the federal and state tax are approved, motorists still will be paying less for gasoline than they were accustomed to doing until recently. Paying more at the pump may be the price for decent interstates and local highways.