Two bi-partisan proposals for a federal gas tax increase

By Chrissy Mancini Nichols

Nov 17, 2010

This post first appeared at metroplanning.org

Inflation has eroded about a third of the gas tax’s purchasing power since 1993, while improvements in vehicle fuel economy also have reduced the effectiveness of fuel taxes. Yet the gas tax still provides considerable revenue our nation relies upon to improve and expand our transportation network. That’s why two recent proposals have been introduced to increase the federal gas tax, which has not been raised since 1993 – even as the price of gas has doubled.

The first proposal by Sens. Tom Carper (D-Del.) and George Voinovich (R-Ohio) is a 25-cent-per-gallon increase in the federal motor fuel tax from the current 18.4 cents per gallon, rolled out over three years.  If enacted, the $200 billion generated over five years would fund transportation and reduce the deficit. Under the plan, $117 billion (or 15 cents per gallon) would be permanently dedicated to the highway fund, and $83 billion (or 10 cents per gallon) would be used to reduce the deficit.

The second proposal by the bipartisan National Commission on Fiscal Responsibility and Reform – created by President Obama and charged with reducing the federal deficit – is a gradual 15-cent-per-gallon increase in the motor fuel tax by 2015.  The funds would be dedicated toward fully funding the transportation trust fund so that transportation spending no longer requires money from the general treasury.

Transportation investments are not a partisan issue.  Both parties support fixing roads, bridges, and transit systems AND analyses from groups like the Economic Policy Institute show that infrastructure investment is one of the single best ways to fuel economic growth and create new jobs, especially jobs that would disproportionately benefit workers hit hardest by the recession.  The last federal six-year transportation law expired 413 days ago.  Congress is expected to take up a new plan in 2011.  As a member of the T4 America coalition, MPC supports increasing revenues to upgrade our transportation system, concurrent with creating new goals, objectives and performance measures to ensure that money is spent responsibly and with clear accountability to the taxpayers.