The U.S. Highway Trust Fund will be broke by August, according to Obama administration officials. The Wall Street Journal reports of a $7 billion shortfall for transportation projects that is funded by the Federal 18.4 cent gasoline tax. Last year, Congress transferred $8 billion from the general fund to the highway fund. “User fees” such as fuel taxes pay less than 50% of the cost of building and maintaining roads; the rest comes from other revenue such as income and sales taxes.
Former Transportation Secretary Norman Mineta recently disclosed that his greatest disappointment was President Bush’s refusal to consider any kind of funding increase for the U.S. Department of Transportation. The result is that last year’s record gasoline prices resulted in over $100 billion in profits for the top five oil companies, of which very little went to direct public benefit. The highest earner, Exxon, made $150 for every U.S. resident, while gas retailers continue to display signs like this on their pumps.
President Obama continues the Bush administration policy of subsidizing the U.S. highway system from the general fund. Last year, several politicians joined the clamor for gasoline tax ‘holidays’ to give consumers relief from high prices. In 2009, some states — such as Michigan, New Hampshire, and Maine — now consider raising their fuel taxes to fix their crumbling roads. A fuel distributor tax in Vermont went up on June 1.