In 1919, Oregon became the first state to tax motor fuels, “for the repair of the damage done to said highways by such vehicles, machines and engines traveling thereon.” For reference, the mass-market Ford Model T was produced in 1908. Just over a decade later, every state had its own motor fuels tax.
Since 1993, the gas tax has been stuck at 18.4 cents per gallon. With construction costs up due to inflation and the increasing predominance of fuel-efficient vehicles, there is great need for Congress to raise the gas tax to repair and maintain our nation’s roads.
According to the American Society of Civil Engineers, “one out of every five miles of highway pavement is in poor condition and our roads have a significant and increasing backlog of rehabilitation needs.” The backlog for repairs for existing highways is $420 billion, with an additional $167 billion for system expansion. If Congress raised the gas tax by 25-cents, as being advocated by the U.S. Chamber of Commerce and the American Trucking Associations, bringing it to 43.4 cents per gallon, it would raise approximately $291 billion in revenue over the next 10 years.
The National Association of Manufacturers reports that, for highway and bridges alone, the annual funding gap is $91 billion — a cumulative 10-year funding gap of $1.1 trillion. This should be a clear indication that Congress needs to focus on the repair and maintenance of the backbone of our economy — our transportation networks. Furthermore, fully funding the FAST Act (and increasing funding in its reauthorization) for critical programs such as the Capital Investment Grant program, Bus and Bus Facilities, and BUILD (previously known as TIGER), will assist state and local governments in advancing regionally significant projects.
It should be well known by now that we need a reliable, sustainable, long-term funding source for the Highway Trust Fund — and increasing the gas tax is the answer.
That being said, there will be an initial sticker shock. Most of the nation’s income tax brackets, exemptions, deductions, and credits currently rise with inflation every year. Since the federal gas tax hasn’t been increased in 25-years, it might come as a surprise that the user fee has increased. But what are the other options to providing a long-term reliable funding source to the Highway Trust Fund? In previous years, proposals had ranged from increasing collection rates on unpaid taxes, raising customs fees, selling off oil from the Strategic Petroleum Reserve, and others.
One is hard pressed to find something that costs the same today as it did in 1993. The costs of materials used in road and bridge construction has increased over the last two decades. Increasing the gas tax is the most logical way to return solvency to the Highway Trust Fund.
A tax that increases each year alongside construction cost inflation and fuel-efficiency growth will bring the nation’s transportation account from deficits to surpluses. Had this been done initially, the increase would have been gradually phased-in, increasing 1-cent each year — which is a feature of Congressman DeFazio’s “Investing in America: A Penny for Progress Act.”
This might be considered a political nightmare for some, anathema and contradictory to campaign rhetoric. But raising the gas tax, at least for Republican governors and state representatives, isn’t the wooden stake that kills political careers. Twenty-two states have imposed higher gas taxes in the last five years, with 91 percent of state legislators supporting an increase in their state gas tax being reelected in the following election, according to a report from the American Road and Transportation Builders Association (ARTBA). ARTBA reports that many not reelected, lost due to other major policy issues.
Our country needs to improve our transit systems and infrastructure to increase economic growth, enhance safety, and improve mobility of our people and goods. One of the most important federal functions established by our Constitution is the obligation to build and maintain a national infrastructure. To advance this function, it comes down to one main issue — resources. The country needs the sustainable resources afforded by the Highway Trust Fund.
It is time, it has been time.
Bennett E. Resnik is Assistant Counsel and Manager of Government Relations for Cardinal Infrastructure, LLC, a federal infrastructure advisory group that has clients who might benefit from an increased gas tax. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Cardinal Infrastructure LLC or its clients.