Construction and maintenance of the nation’s highways is mostly paid for by the Federal Highway Trust Fund, which gets its money from the 18.4 cent per gallon gasoline tax. Unfortunately, the trust fund is running out of money, and is expected to be depleted by 2015. Because cars are using less gas and because the gas tax hasn’t been raised since 1993, the Congressional Budget Office estimates the tax should be 10 cents per gallon higher and indexed to inflation in order to remain solvent.
Democrats in the U.S. House have introduced a bill to raise the gas tax by 15 cents a gallon, but raising taxes is not a popular idea with Republicans, especially with 2014 being an election year.
Enter Georgia Rep. Tom Graves, who is proposing the Transportation Empowerment Act, which over a period of five years reduces the federal gas tax to 3.4 cents per gallon and transfers much of road infrastructure funding responsibility to the states. The bill has 26 cosponsors, including Georgia Representatives Paul Broun, Phil Gingrey, Lynn Westmoreland and Rob Woodall. A companion bill has been introduced in the Senate by Mike Lee.
The bill probably wouldn’t affect how much you pay at the pump, because it’s expected that states would raise their gas taxes by the same amount the federal government reduces its tax.
Transferring taxing responsibility to the states, even if the tax at the pump remains the same, would actually add dollars available for road construction. That’s because most states, including Georgia, don’t get back all the money they pay in gas taxes, and because many expensive environmental reviews and other requirements imposed by the federal government would be eliminated.
In his Sunday AJC column, Kyle Wingfield notes Georgia would have had an additional $185 million to spend this year if Graves’ proposal was in effect today.
Congress will need to pass something before the end of the 2014 fiscal year in September because the current transportation bill is expiring. It will be interesting to see if Graves’ bill gets any traction.