Published on December 5, 2013

TIA opposes, other groups support hike in fed fuel tax

By Miles Moore, Senior Washington Reporter

WASHINGTON (Dec. 5, 2013) — The Tire Industry Association (TIA) opposes a new bill in the House of Representatives that would raise the federal fuel tax by 15 cents a gallon to increase funding for the U.S. transportation system.

“Rather than keep raising taxes, we need to look at where the money’s going and who’s paying,” said Roy Littlefield, TIA executive vice president.

By opposing H.R. 3636, TIA stands in contradiction to the American Trucking Associations (ATA), the AAA, the AFL-CIO, the U.S. Chamber of Commerce and many other groups that have declared support for the measure.

Rep. Earl Blumenauer, D-Ore., announced the introduction of H.R. 3636 at a Dec. 4 press conference.

He noted that the federal fuel tax, currently 18.3 cents per gallon on gasoline and 27.3 cents per gallon on diesel fuel, hasn’t been increased since the Clinton administration. This leaves the Highway Trust Fund with insufficient funds to pay for road, bridge and mass transit projects, he said.

“Today, with inflation and increased fuel efficiency for vehicles, the average motorist is paying about half as much per mile as they did in 1993,” Rep. Blumenauer said.

The ATA issued a statement Dec. 4 supporting the bill.

“Underinvestment in highways is an enormous burden on the trucking industry, raising the cost of moving freight and undermining the reliability of a logistics system that is critical to our nation’s competitiveness,” said Bill Graves, ATA president and CEO. “The additional investment in highway projects made possible by this new revenue will significantly improve the safety, reliability and efficiency of the trucking industry, to the benefit of all Americans.”

TIA, however, opposes any change to the federal fuel tax.

“At the current rate of spending, the Highway Trust Fund will run out of money in 2015,” Mr. Littlefield said. “But 15 or 20 cents a gallon won’t be enough to solve the problem. How high do we go?”

Also, diversion of highway funds to other purposes averages in the high-20th percentile across the U.S., and goes as high as 70 percent in some states, according to Mr. Littlefield. H.R. 3636 would do nothing to address this problem, he said.

Mr. Littlefield questioned the wisdom of using federal fuel tax money to fund projects that don’t specifically benefit highway users.

“Mass transit projects and bicycle paths are fine, but should we raise fuel taxes to pay for them?” he said. “A lot of mass transit projects are extremely underused. If you want proof, go to Baltimore and ride the subway.”

Creative solutions are needed to the problem of highway funding, according to Mr. Littlefield. He noted that Virginia raised a considerable amount of money for highways while cutting the state fuel tax, whereas neighboring states Maryland and Pennsylvania are enacting large increases in fuel taxes.

“Maybe the answer is better management, not higher taxes,” he said.

The Rubber Manufacturers Association declined comment on H.R. 3636.

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To reach this reporter: mmoore@crain.com; 202-662-7211.

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