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Gas tax increase pits builders against voters

Sean Ryan
sean.ryan@dailyreporter.com

A federal gas tax increase might be the easiest way to pay for national highway construction and the hardest proposal to slip past voters.

Proponents of such an increase have failed in every attempt for the last 16 years.

But Congress is considering a six-year, $500 billion transportation reauthorization bill to replace the soon-to-expire law, and builder groups are promoting a federal gas tax increase as the best way to pay for the plan.

Representatives from the Associated General Contractors of America say the federal government should raise the 18.4 cent-per-gallon gasoline tax by 18 cents and set up the tax so it automatically increases to keep pace with construction cost inflation.

But the political pressure that prevented gas tax increases since 1993 threatens to foil this year’s attempt to pay for the transportation reauthorization bill, said Brian Deery, senior director of the AGC’s highway and transportation division.

“Nobody likes to raise user fees, taxes or whatever you want to call them,” he said.

Trucking and automotive businesses support the increase even though they would be hit hard, but voters still react negatively when prices go up at the pump, said Pete Sepp, vice president for policy and communication for the National Taxpayers Union, a lobbying organization based in Alexandria, Va. He said government should limit spending on mass-transit projects and tighten cost controls on federal projects instead of looking for more money.

“I don’t doubt that some (highways) are coming to the end of their useful life,” he said. “We would argue that if you need more money, you can work with members of Congress and us to find places where you can spend less money.”

Deery said Congress should appoint a commission to determine gas tax increases, similar in approach to the military’s Defense Base Closure and Realignment Commission. The military commission decided which bases should be closed and avoided political roadblocks from members of Congress who did not want to lose bases in their districts.

The gas tax commission’s decisions could stand unless opposed by two-thirds of Congress, Deery said.

“It would sort of give political cover,” he said.

Giving a panel of appointees taxing authority may violate Constitutional requirements that elected officials make the decisions, Sepp said, adding the commission would not provide much political cover anyway.

Builder associations in Wisconsin, which repealed its gas tax index in 2005, still want the automatic annual increases restored. It may be more difficult to get political support for state increases if the feds approve one first, even if the cost difference at the state level is minimal, said Kevin Traas, director of transportation policy and finance for the Wisconsin Transportation Builders Association.

“Obviously, if it adds to the tax burden, there’s a perception that if it happens in one place you can’t do it somewhere else,” he said. “But a little over a year ago, gas peaked at $4.20 a gallon, and now it’s at about $2.35.”

But the entire gas tax discussion may be put on hold for more than a year. As the House considers the proposed transportation reauthorization bill, the Senate and President Barack Obama’s administration instead support a proposal to extend the current transportation bill for 18 months.

Traas said the delay would give the economy more time to recover and also postpone gas tax decisions until after the 2010 Congressional election.

“Personally,” he said, “I think the reason that they’re doing that is they know you don’t talk about gas taxes in a recession.”

3 comments

  1. If you want to stop the increase of taxes — gas or otherwise — get the campaign bribes out of the political system. Even when the budget is being cut, road building increases… because the road builders paid dearly in the political process. Only public funding of campaigns will cause politicians to vote for the public rather than their pocketbook.

    Also, though I don’t remember the exact source, the majority of road projects are the result of road builders and their lobbyists finding potential projects and submitting to the DOT… not generated by citizen complaints or DOT surveys. Then our politicians fall in line, because they are paid to fall in line.

    Jack Lohman
    http://moneyedpoliticians.net

  2. Taxed Enough Already

    AAAARRRRGGHHHHHH!!!!!!

    I don’t even know where to begin, in addressing this ****-ola.

    For starters….The absolute dummest thing to allow…is a tax that can automatically increase each year. NO, NO, a thousand times NO.
    If these bast@*ds want more tax money from us, then at least make them ask for it, and state their case, or put it to a referendum.

    Secondly…NO COMPANY PAYS FOR THIS INCREASE TAX…it will ALL, I repeat ALL be passed on to the consumer in higher prices…causing inflation…which your automatic increase will be tied to…causing higher taxes…more inlflation…a snowballing vicious cycle.

  3. Taxed Enough Already

    OK…Ranting is over. Time for a solution.
    It’s real simple. Do what everyone else has to do.
    Make real spending CUTS. MAKE DO ON LESS!!!

    Here’s a plan to get a quick 150 Million per year. Make the politicians start and run their own 401K retirement plans, instead of the outrageous pensions we taxpayers provide for them….They should be smart enough to figure out how to manage that on $175,000, plus expenses and per diem each year. I know we all do….for a lot less than that.

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