Gas tax increase out of highway bill, TIA says

WASHINGTON (June 16, 2015) — An increase in the federal motor fuel tax is no longer a possibility for surface transportation reauthorization this year, according to the June 15 edition of the Tire Industry Association's (TIA) Weekly Legislative Update.

“Although President Obama, Democrats and Republicans can't agree on a bill, they can agree that the federal gas tax will remain unchanged at 18.4 cents per gallon, a price it has maintained since 1993,” the TIA document said.

President Barack Obama and Transportation Secretary Anthony Foxx believe that transportation funding should come from business reforms and not direct taxes to the public, a belief reflected in the GROW AMERICA Act, the administration's six-year, $478 billion funding package, TIA said.

“The funding situation that places a tag on who should pay what gets very tricky, politically speaking,” TIA said. “It seems that most legislators are worried that supporting a certain funding idea will upset their constituency of donors.”

TIA opposes an increase in the gas tax. The American Road & Transportation Builders Association (ARTBA), which supports an increase, issued an analysis June 15 showing that gas tax increases have little effect on gas prices.

According to the ARTBA analysis, the price for a gallon of regular gasoline the day after a state gas tax increase goes into effect reflects only about 22 percent of the new levy.

“A month after enactment, only about a third of the levy shows up in the pump price…and thereafter it is not a significant retail price factor.”