Sunday, May 15, 2011

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