By Jay Ramey, Crain News Service
WASHINGTON (Feb. 2, 2015) — Falling gas prices still seem like an unexpected gift that many drivers are thankful for, and the effects of the 60-percent drop since June of 2014 are just now beginning to be felt in global markets and the automotive industry.
While some of these effects are plainly evident — you're not merely imagining more new trucks and SUVs on the road — the falling prices have also reminded Washington that there's an often overlooked component to the price of gas.
That component is the federal gas tax which now stands at 18.4 cents and gallon. One of its purposes is funding the federal Highway Trust Fund, which is designed for the maintenance of transportation infrastructure.
With the national gas price average hovering just above $2 for the past few weeks, there have been indications of bipartisan support on Capitol Hill to raise the federal gas tax in order to replenish the Highway Trust Fund, which is projected to have a shortfall of more than $160 billion over the next decade.
At least there used to be indications of bipartisan support in the Senate for raising the federal gas tax, with Republican Sens. Orrin Hatch, John Thune and Jim Inhofe voicing their support for a plan to apply a 12-cent hike over the next two years, according to the Washington Post. However, the idea of a hike in the gas tax does not seem as appetizing to House leadership, even though Senate Majority Leader Mitch McConnell and Speaker of the House John Boehner have voiced support for infrastructure spending bills.
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“I've never voted to raise the gas tax,” Speaker of the House John Boehner told the Washington Post. “Funding a highway bill is critically important, it's a priority for this year, how we'll fund it we're going to have to work our way through this. It's doubtful that the votes are here to raise the gas tax.”
The debate over the gas tax has also highlighted the fact that 18.4 cents in 1993 has the purchasing power of about 30 cents today and that a hike in the tax as small as 12 cents, as proposed by GOP Senator Bob Corker and Democrat Chris Murphy, would only allow it to catch up to 20 years worth of inflation.
The Highway Trust Fund is projected to start running dry this spring. At the moment, it looks like there are not enough votes in both chambers for an increase in the federal gas tax, even though there is consensus over the need to replenish the fund.
“We've got to find a way to deal with America's crumbling infrastructure and we need to do it in a long-term program that is in fact funded,” Speaker Boehner told the Washington Post.
This is the most fuel-efficient pickup in America: The 2014 diesel-powered Ram 1500 pickup gets 28 mpg on the highway, the top rating for any pickup in the U.S. The mileage ratings were announced recently on the Environmental Protection Agency's website.
Critics of the federal gas tax and the Highway Trust Fund have cited that individual state taxes on gasoline and diesel, which vary widely, provide for most of the highway spending in individual states, and that monies from the Trust Fund have at times been allocated in a disproportionate manner.
For now, having the votes needed to enact a federal gas tax hike in both houses seems like a longshot. A recent poll indicates that public support is equally thin for a gas tax hike on a federal level.
It appears that we'll get to enjoy low gas prices for a while longer, even if there is no guarantee they'll stay this way even in the short-term.
This report appeared on the website of Autoweek magazine, a Detroit-bases sister publication of Tire Business.