Subscribe to our free, weekly email newsletter!



AASHTO’s gas tax plan

By Jeff Berman, Group News Editor
October 18, 2010

When it comes to the federal gasoline tax, there are two things that are clearly not secrets. One being that it is the primary funding mechanism for national highway infrastructure repairs and maintenance and the other being that the tax has not been raised in 15 years.

In this congressional climate, the specter of raising this tax to get the Highway Trust Fund closer to solvency instead of having to count on continuing resolutions from the federal government to keep funding at existing levels intact for relatively short periods of time is all but nil.

The reason for not raising the gasoline tax from its current levels of 23.4 cents for diesel and 18.4 cents per gallon of gasoline which has not increased since 1994? By most accounts, the common refrain tends to be “a lack of political will.”

Be that as it may, political will does not make laws and influence decisions, actual votes and more than just political posturing do. And with the current Congress agreeing to disagree on all matters large and small, it is hardly a surprise that we are seemingly talking about the same issues affecting the supply chain and logistics sector on an annual basis.

But I digress….when it comes to the gasoline tax, recent news from the American Association of State and Highway Transportation officials (AASHTO) is somewhat encouraging.

Last week, AASHTO unveiled a proposal for Congress that it said would “convert the federal tax on gasoline and diesel fuel from a cents-per-gallon basis to a percentage basis, a mechanism that could raise revenues to pay for greater highway and transit investment if the price of fuel rises in future years.”

According to AASHTO, the gas-tax option outlined would entail an 8.4% tax on a gallon of gas instead of the current 18.4-cent gas tax, and the tax on a gallon of diesel would be 10.6% instead of the current 24.4 cents. AASHTO added that it estimates the changes would potentially raise an additional $43 billion over six years, assuming the price of gasoline increases as the government projects.

By raising $43 billion over six years, this change in the gasoline tax would result in an average increase of more than $7 billion per year in revenues and would enable the next surface transportation reauthorization bill to fund $330 billion in new projects, compared to $287 billion funded under SAFETEA-LU which expired on September 30, 2009.

And how about this for one more daunting number: even with these proposed changes, AASHTO estimates that the country will still need $565 billion for the next six-year transportation reauthorization bill, meaning even with these proposed changes there would still be a $235 billion funding shortfall.

These numbers do not lie. On top of the prolonged economic situation, even with some evidence of a modest recovery afloat, more needs to be done to get the country and the freight economy back on track. Taking a closer look at making overdue changes to the federal gasoline tax may be a good step in that direction, when one considers the massive funding shortfall we are facing.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through December 20 with a nearly $11 billion stopgap fix.

Article Topics

Blogs · AASHTO · Gasoline Tax · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA