Gas Tax Increases are Coming Down the Road

Proving yet again that unintended consequences occur from government policies, we’re hearing noise about increasing the gas tax at both the state and federal level. The reason? We’re driving less, conserving fuel and helping the environment as we’ve been urged to do. But now we’re not buying enough fuel to generate the “revenue” to pay for highways and the like. The innovative solution being carted out is more taxes. First, nationally:

The 15-member National Commission on Surface Transportation Infrastructure Financing is the second group in a year to call for increasing the current 18.4 cents-a-gallon federal tax on gasoline and the 24.4 cents-a-gallon tax on diesel. State fuel taxes vary.
In a report expected later this month, members of the infrastructure financing commission say they will urge Congress to raise the gas tax by 10 cents a gallon and the diesel tax by up to 15 cents a gallon. At the same time, the commission will recommend tying the fuel tax rates to inflation.
The commission will also recommend that states raise their fuel taxes and make greater use of toll roads and fees for rush-hour driving.

Well, Rhode Island is ready to follow suit:

The proposals include increasing the gasoline tax, now 30 cents, by up to 15 cents per gallon by 2016, which would raise an estimated $64 million per year. They also include a new “petroleum products gross earning tax,” beginning with the equivalent of 10 cents per gallon of gasoline in 2010 and adding another 5 cents in 2014. That would affect all petroleum products, from gasoline and aviation fuel to those made from petroleum derivatives, such as plastics, paint and fertilizer. It would eventually raise about $66 million per year, the draft report says.

At the state level, the gas taxes haven’t actually gone toward what they were supposed to–roads and infrastructure. Instead, they’ve been lumped into the general fund and all highway renovation has been bonded. (We’ve gone over this a million times). Given this track record, how can Rhode Islanders be assured that “this time is different”?

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13 years ago

This is awesome. We need to encourage people to be fuel efficient, so let’s raise the gas tax. Uh oh, people are driving less, so let’s raise the gas tax. Better yet, we’ll track people by their mileage. Let’s have the government track people with transponders, privacy be damned. Or how about more tolls? That’ll create so much congestion that people will idle away more gas and then the gas tax revenues will go back up…perfect!
Wouldn’t it be better to drive down the cost of construction labor so that we can afford to rebuild with what we have? With all of the unemployed, we should be able to lower labor costs, no?

13 years ago

There will be more than the gasoline tax raised in the coming future according to the below AP story.
Glad I drive less than 50 miles a day if I drive at all and have access to one of the nation’s award winning best public transit systems at $440 a year pass ($30 for age 65 and above) with unlimited rides 24/7.
“Oregon looks at taxing mileage instead of gasoline
By RYAN KOST – 23 hours ago
PORTLAND, Ore. (AP) — Oregon is among a growing number of states exploring ways to tax drivers based on the number of miles they drive instead of how much gas they use, even going so far as to install GPS monitoring devices in 300 vehicles. The idea first emerged nearly 10 years ago as Oregon lawmakers worried that fuel-efficient cars such as gas-electric hybrids could pose a threat to road upkeep, which is paid for largely with gasoline taxes.
But Oregon is ahead of the nation in exploring the concept, even though it will probably be years before any mileage tax is adopted.
Congress is talking about it, too. A congressional commission has envisioned a system similar to the prototype Oregon tested in 2006-2007
Governors in Idaho and Rhode Island have considered systems that would require drivers to report their mileage when they register vehicles.
In North Carolina last month, a panel suggested charging motorists a quarter-cent for every mile as a substitute for the gas tax.
James Whitty, the Oregon Department of Transportation employee in charge of the state’s effort, said he’s also heard talk of mileage tax proposals in Ohio, Pennsylvania, Florida, Colorado and Minnesota.
“There is kind of a coalition that’s naturally forming around this,” he said.”
Link to full newspaper story:

Tom W
Tom W
13 years ago

>Wouldn’t it be better to drive down the cost of construction labor so that we can afford to rebuild with what we have? With all of the unemployed, we should be able to lower labor costs, no?
Federal and state “prevailing wage” laws and “project labor agreements” ensure that unionized workforces are used – so that taxpayers incur much higher costs for all public building projects.
Think of it as corporate welfare for unions.
This is also why “infrastructure” projects to “stimulate the economy” are so in vogue right now with Democrat politicians – they’re are sop to the unions (similar to the “auto industry” bailout really being a bailout of the UAW).
More money to the unions means more money to Democrat election campaigns. They both win. Only the taxpayers lose …

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