The stubborn gasoline tax

Stateline, a nonpartisan, nonprofit news service of the Pew Center on the States, recently published an article titled "The stubborn gasoline tax: It's hard to increase, hard to reduce". It was written by Josh Goodman, Stateline Staff Writer. A link to the article is below.

http://www.stateline.org/live/details/story?contentId=573427

I have one angle on this article that you did not attack as part of the preparation of an otherwise balanced article. I want to stress that nobody is bringing this issue up in the public media.

That issue is the cost of construction materials over the last decade and how they have eroded the value of gas tax that is collected.

Below is a link that is posted by the Ohio Department of Transportation. I recommend the Trends and Forecasts at the bottom of which there is an archive. The Construction Cost Outlook includes a graph of the escalation of material costs in Transportation and how they are in the double digits for many of the years. All the while many states have not increased taxes to absorb these costs.

http://www.dot.state.oh.us/Divisions/ConstructionMgt/Estimating/Pages/default.aspx

This means fewer projects. This means more than just blue collar union jobs. I am an engineer and transportation work is my work. Over the course of the last 10 years the number of projects being built reduces, the number of projects being designed reduces. I have lost my job and was forced to relocate in 2007. In the time since, work in this industry has not been robust because there is fewer and fewer dollars to do it.

I am conservative. That cannot mean no taxes ever though. Cutting fuel taxes without a proportionate revenue replacement is ridiculous. Congress is telling states they will not raise the federal gas tax (not raised since 1993) but will also not allow states to put tolls on existing interstates (Rhode Island LaHood article today (LaHood Cool to Rhode Island Governor's I-95 Toll Idea)

You cannot have it both ways. The money has to come from somewhere. Transportation for years has been a pass as you go funding mechanism for the most part and Congress and the administration now want to put it in the category of social security and punt it to the future for our kids to pay for.

What was the price of a gallon of gas in 1993? Gas prices in 1993 were at an average of $1.07. The 18.4 cent federal gas tax is the same today. With gas prices currently at $4, a 10 cent rise on federal taxes would look like a normal weekly swing in prices. And do not forget that fuel is required to fuel the equipment that builds the roads.

Raising the gas tax will save jobs, be real investment in our future and restore our declining assets

Stimulus II in the works

Transportation Weekly is reporting that a new $75 billion economic stimulus package, to be paid with TARP, is currently in the works for passage early next year. The package will include about $48 billion in new infrastructure spending, including $37.3 billion for the U.S. Department of Transportation under near-identical conditions to those accompanying the $48.1 billion in the first stimulus Act for USDOT. Highways and bridges would get $27.5 billion.

The position here is that Congress should be working to provide a long term solution to transportation funding instead of providing short term band aids that do not adequately address the true infrastructure needs of the country. State transportation departments are cutting projects because adequate funding does not exist in the long term program. The long term program needs to be addressed now.

Stimulus dollars under the rules of last year will only address more bandaid projects.

An article in the Wall Street Journal today by Christopher Conkey discussed the latest call for an Infrastructure Stimulus as a result of the "Jobs Summit" going on in Washington
http://online.wsj.com/article/SB125978948194373437.html

House Transporation Committee Chairman James Oberstar is calling the $69 Billion in new shovel ready projects proposed by AASHTO "a nice down payment" to create and save jobs. The problem is that most of these shovel ready projects are maintenance projects that are light on heavy construction. The real need is for a complete and comprehensive transportation bill that replaces the bill that expired on September 30th. Without this bill, transportation projects that are funded with the regular allocation of dollars are at the mercy of continuing resolutions that give state transportation officials little comfort when planning the projects to bid in 2010.

States began to feel the pinch when fuel prices started rising, leading to a corresponding rise in asphalt and other materials costs. Any annual increases in funding built into the last bill were canceled out by the rise in costs for materials. The result is that state transporatation departments have substantially less money to work with than they did five years ago.

No one likes a tax increase, but the reality is that the Federal Gas Tax has been the same since 1993. This is why the Obama administration is proposing an 18 month extension in the bill that woulg get Congress past the midterm elections to raise the Gas Tax. What our country needs right now is a Congress to govern, and present to us the American people what we need to do. People are smart enough to absorb the facts when presented. Time to make the case for a fully funded transportation bill to continue the importatn part of the economy that designs and builds the highways and bridges of our country.

Highway Funding in Crisis - The Ignorance of our Congress

We wonder why the highway trust fund is nearing insolvency in a time of these various givens.

1. Deteriorating infrastructure, whether they cost lives in bridge collapse in Minnesota or inconvenience of bridge closings due to unsafe conditions
2. Increasing congestion slowing the moving of goods for industry
3. The same congestion slowing commutes for drivers
4. Federal Trust Fund dollars diverted by earmarks for projects outside of the priorites of State transportation officials
5. Federal Gas Tax, the primary revenues source of the Highway Trust Fund remaining unchanged in better than ten years.
6. Double digit inflation in the construction industry costed by increased fuel costs reducing the buying power of the highway departments

Sure, there are politicians grandstanding with varying "solutions" in this election year. There is talk of private investment (translation tolls) to solve the problem. This is one tool in the tool box, but today I must point out a symptom of the problem that lies with our elected officials.

Today in the Toledo Blade, Congresswoman Marcy Kaptur, (9th District Ohio) has a letter to the editor entitled " Time to stop state drain on turnpike". A link to it is below.

http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20080525/OPINION03/805250315/-1/OPINION

In this letter, Ms. Kaptur is critical of the Ohio Department of Transportation for diverting Ohio Turnpike tolls. One exerpt of Ms. Kaptur's letter;

"Turnpike dollars have been systematically diverted to build "freeways" across other growth corridors of the state: U.S. 30 from Indiana through Upper Sandusky to Pennsylvania and I-70 from Indiana through Columbus to Pennsylvania. In fact, there are so many interstates around Columbus, one can spend an entire day cruising that spaghetti."

This is a time to remind Ms. Kaptur that tolls from the Ohio Turnpike are used to retire the debt on the building of the turnpike, its service plazas and the subsequent widening in recent years. The construction of the upgrading of US 30 and all of the other interstate highways in Ohio are funded with Federal Gas Tax dollars dispersed by Congress to the states and then allocated by ODOT. There is more from Marcy

"...our federal taxes are not returned along this northern corridor, while turnpike users are charged rising tolls which the state then diverts to points south. Our tolled corridor becomes an economic straightjacket pitted against "free ways" in other parts of our state."

None of these diversions have taken place. Rising tolls are funding the widening of the Turnpike. In recent years ODOT has transfered money to the turnpike to reduce tolls on trucks to encourage them to use the safer turnpike instead of other two lane state highways.

One of the points of this letter by Ms. Kaptur is to tout a plan by Govenor Strickland to use turnpike tolls for his economic stimulus package and to spend highway trust fund dollars on other modes of transportation. While promoting rail and transit is important, the transfer of inadequate levels of highway dollars for these other modes is ill concieved when ODOT is unable to fund its current program.

ODOT has commited significant dollars in recent years to reconstruct US 20 along the turnpike in Wood County, a project that is ongoing to widen toward Woodville. Earmarks from Congress were responsible for the US 20 SR 420 interchange and the I-75 SR 795 interchange.

Ms. Kaptur, do not rant about topics like these without getting your facts straight. I am sure this will help to brainwash an unknowing electorate to get you reelected by near unanimous margins but does little to solve the problems you are elected to do.

A Call for Highway Funding

At the recent dedication ceremony for the Veterans' Glass City Skyway in Toledo, Ohio Senator George Voinovich was the only politician of many speaking at the ceremony that touched on the need to work toward our next big projects by reopening the Highway Bill. This is an open letter to the Senator. I encourage you to do the same.

Senator George Voinovich
Washington, DC Office:
524 Hart Senate Office BuildingWashington, DC 20510

Dear Senator:
I would like to thank you for attending the dedication ceremony of the Veterans’ Glass City Skyway on Saturday June 23, 2007. It is a special time in Toledo to finally open as a reality a dream that so many have had for so many years.

I am a local civil engineer that had the privilege of serving on the Project Management team for seven years. As a life long Toledoan who has always dreamed of building roads it was truly an opportunity of a lifetime. It is also the reason I write to you today as an unemployed civil engineer.

You touched on it nicely during your speech. The realities of rising costs of fuel and steel have made the increases in funding proposed in the last transportation bill inadequate to cover the double digit inflation levels in the construction industry. Projects are getting delayed as the bids are coming in well over the amounts budgeted for them. The more critical item for people in the engineering field are that fewer projects are going to design as more projects are left on the shelf waiting for construction dollars to come available.

Engineering firms all over Ohio are suffering from this slowdown. We all know that there are needed projects all over Ohio that need to be addressed. A lack of funding for these projects is leaving them on the sidelines while the engineers of Ohio wait to make them happen.

As stated by Becky Schultz in Equipment Today, “Over the past 25 years, vehicle miles traveled in the United States have doubled, and truck travel has increased at an even faster rate. Yet, lane-mile capacity has increased by only 5.2%. What's worse, freight tonnage shipped by truck is projected to double by 2035”. As costs and needs continue to rise, the federal gasoline tax that funds these projects has remained flat since 1997.

It is critical to our economy to keep the engineers of Ohio working. Congress must reopen the highway bill and enact legislation that is indexed to the rising costs of construction. .

House Transportation Committee Links

As a beginning to the new blog to discuss issues related to thetransportation industry, I am sending out this note that provides the websites related to the House Transportation and InfrastructureCommittee.

Alot of information is available at this site to keep youinformed of the issues related to our industry.As information is digested, summaries will be posted on the blogrelated to NW Ohio and the Transportation Industry.

Website: http://transportation.house.gov/

Members: http://transportation.house.gov/about/index.shtml#members

A report on the views of the committee is available at the following website:http://transportation.house.gov/about/ViewsEstimates.pdf

The forms for Congressional Earmark Certification, or as Nancy Pelosi is calling them "Legistlative Directives" are available at the following website:http://transportation.house.gov/Earmarks/index.shtml

House Transportation and Infrastructure Committee
Chairman James Oberstar
Contact the Committee
2165 Rayburn
House Office Building
Washington, DC 20515
Phone: (202) 225-4472
Fax: (202) 226-1270

--Black Swamp Road Geek
http://blackswamproad.blogspot.com/
bsroad@gmail.com
Spreading the word about the transportation industry in a manner thatis easier to understand.

Yesterday, Ohio Governor Strickland announced that he has directed ODOT to partner in the Clean Fuel Initiative by using CMAQ funding to allow local communities to retrofit older deisel engines with clean diesel technology


Here is a link to the news release

http://www.dot.state.oh.us/news/2007/05-22-2007.htm

CMAQ stands for Congestion Mitigation and Air Quality. CMAQ program is intended to realign the focus of transportation planning toward a more inclusive, environmentally-sensitive, and multimodal approach to addressing transportation problems. Transportation projects that improve capacity improve air quality by reducing the time vehicles are idling in congested areas.

In 2005, Congress renewed the CMAQ program in SAFETEA-LU requires States and MPOs to give priority in distributing CMAQ funds to diesel engine retrofits, and other cost-effective emission reduction and congestion mitigation activities that provide air quality benefits. SAFETEA-LU and the CMAQ program are funded by the Federal Gas Tax.

Updating local community fleets is a noble cause that needs to be funded. The use of transportation dollars in this manner at a time when transportation budgets are stressed due to rising fuel costs. Updating transit bus fleets is a sensible use of these dollars. Other government fleets using these dollars amounts to a grab of gas tax dollars intended to fund transportation projects. This is similar to the State Highway Patrol being funded in this manner.

The next time you are sitting in traffic waiting for a long awaited road improvement, remember that your transportation tax dollars are being diverted for non transportation uses.