Federal gas tax expires in September

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.

5 Comments

  • Warren T
    August 18, 2011 - 3:33 pm | Permalink

    Allow me to play devil’s advocate for a moment and say that since our economy is in the state it is in, perhaps any funds for transportation should be used to maintain the current system. How about a moratorium on most NEW projects for a year or two. We could spend money on maintaining existing infrastructure and focus more on increasing awareness and safety for those cyclists who ride with automobile traffic by enacting and enforcing 3-foot laws, etc., with heavy emphasis on enforcement. We’re not going to get out of the economic mess we’re in without spending cuts and freezes. When my parents went through the great depression they made do with what they had. Looks like it’s time for us to tighten our belts and do the same, not just expect everyone else to tighten their belt so we can get what we want.

  • Warren T
    August 18, 2011 - 3:33 pm | Permalink

    Allow me to play devil’s advocate for a moment and say that since our economy is in the state it is in, perhaps any funds for transportation should be used to maintain the current system. How about a moratorium on most NEW projects for a year or two. We could spend money on maintaining existing infrastructure and focus more on increasing awareness and safety for those cyclists who ride with automobile traffic by enacting and enforcing 3-foot laws, etc., with heavy emphasis on enforcement. We’re not going to get out of the economic mess we’re in without spending cuts and freezes. When my parents went through the great depression they made do with what they had. Looks like it’s time for us to tighten our belts and do the same, not just expect everyone else to tighten their belt so we can get what we want.

  • MikeOnBike
    August 18, 2011 - 6:30 pm | Permalink

    I guess I could play “angel’s advocate” and say that now is the best time for the government to be investing in infrastructure.  Interest rates are around zero, and there’s a surplus of labor available.

    (Sorry if macro-economics is too far off topic.)

  • August 18, 2011 - 6:35 pm | Permalink

    Spending cuts are inevitable and necessary, but I ask for equitable cuts across the board, versus completely eliminating enhancement and transit funding.

  • Tom
    August 21, 2011 - 1:21 am | Permalink

    The tax, of course, should be raised since it is outrageous that congress injects non existent money into the system.  On the other hand, I am fine with building no new highways.  

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