Have you noticed the 18.4 cent Federal gasoline tax that funds 90% of the U.S. Highway Trust Fund expires on September 30?
The Highway Trust Fund was created in 1956 to finance the Interstate Highway System and is funded through excises on gasoline, diesel fuel, other fuels such as gasahol and CNG, tires, and tractor trailers.
In recent years, Congress has authorized $30 to $40 billion annually for programs funded by the Highway Trust Fund, and the Highway Trust Fund mostly kept up with the spending until 2008. Since 2008, Congress has had to infuse $8 billion to $19 billion annually into the Highway Fund so the Federal Government can pay for its surface transportation funding obligations.
The lion’s share of highway spending goes to building new highways, but a small chunk goes toward “transportation enhancements.” These are programs like Safe Routes to School, pedestrian and bicycle facilities, bicycle safety education programs, as well as many other enhancements like tourist rest stops, highway landscaping, and so forth. About 11% of the Highway Fund goes to the Federal Transit Authority for public transportation projects.
The excise taxes that fund all of this will expire on September 30. Because almost every Republican in the U.S. Congress has signed a “no tax hike” pledge, there some resistance to the idea of extending this 55-year-old tax, and some Republicans have hinted they’ll use the gas tax as a negotiation tool to force Democrats to eliminate enhancements and transit funding from the Federal transportation program. The net result in these recessionary times will be increased funding for highway projects and no money for more beneficial transportation projects.
Grover Norquist, the influential anti-tax activist who persuaded GOP members to sign the “no taxes” pledge, says he’s okay with renewing the gas tax, but would like to see the Federal gas tax eliminated eventually and all funding and spending decisions relegated to the states.
The gas tax is normally a routine renewal, but when Congress meets again on September 6, I foresee transportation policy battles that will result bike and transit programs completely axed from the Federal budget in order to keep the Highway Trust Fund afloat. Call your Congress Critter today and get this on their radar if you’re concerened about these issues.