With gas prices reaching $3 per gallon or more as a result of disruptions to the motor fuel supply chain, some are calling for a suspension or repeal of the 18.4 cents-per-gallon federal tax on motor fuel sales. Since 1956, this excise has served as a user fee to generate dedicated revenue for the Highway Trust Fund, the source of federal investments in state and local highway and public transit improvement programs.
The American Road & Transportation Builders Association (ARTBA) offers 10 reasons why such a move would be extremely bad public policy:
1. Starving the federal Highway Trust Fund of revenue is not a solution to higher gas prices. Providing and maintaining transportation infrastructure is a core function of government. It’s an essential platform for economic activity and facilitates the provision of virtually all essential public services — fire and emergency response, law enforcement, homeland security and national defense.
2. Suspending the federal gas tax would reduce revenues to the Highway Trust Fund by $2.5 billion per month — the resulting cut in state and local highway and transit improvement programs would jeopardize 120,000 American jobs.
3. Even if the federal excise were reduced, the federal government could not guarantee that gas prices would drop commensurately at the pump. In fact, research shows that when the states of Illinois and Indiana temporarily suspended their sales tax on motor fuel purchases in 2001 in response to escalating retail prices, the impact on consumer pocketbooks was minimal; almost half of the revenues were pocketed by the oil and gas industry; and state transportation improvement programs were shortchanged by tens of millions of dollars.
4. Reducing or eliminating the federal motor fuels tax would do nothing to increase the supply of motor fuels — a major reason why motor fuel retail prices are up.
5. Repealing the federal gas tax, even for only a few months, would bankrupt the Highway Trust Fund as early as 2006, leaving nothing to cover outstanding obligations. The highway and transit bill just passed by Congress and signed into law by President Bush August 10 will utilize all available revenues projected to be collected for the Highway Trust Fund through September 2009. Right now, the trust fund balance stands at $10 billion. Without the collection of highway user fees, these bills would have to be paid using general fund, thus increasing the federal deficit.
6. The federal gas and diesel excises have had nothing to do with the recent dramatic increase in gasoline and diesel fuel prices. The federal gas tax rate has not changed since October 1, 1993.
7. What would happen when the federal gas tax suspension is lifted? Would Americans experience — in one day — an 18.4 cent per gallon spike in the retail price of motor fuel?
8. Cutting federal investments in highway and transit improvements will exacerbate traffic congestion across the nation — causing motorists and truckers to spend even more on motor fuel. Research by the Texas Transportation Institute shows traffic congestion is now responsible for 5.7 billion gallons of wasted motor fuel in the U.S. each year.
9. Cutting federal investments in highway and transit improvements will affect traffic safety. Nearly 43,000 Americans died last year in motor vehicle crashes. Poor road conditions and outdated alignments were a factor in an estimated one-third of them. Highway crashes cost America $230 billion — $820 per person — each year. Traffic accidents are the leading cause of death of Americans 6 to 28 years of age and result in more permanently disabling injuries than any other type of accident.
10. Using the gas tax as a political expediency would be bad public policy and set a dangerous precedent.
Disaster relief fund available for contractors affected by Katrina
The Associated General Contractors of America (AGC) has established the Hurricane Katrina Construction Workers Fund, through the AGC Education and Research Foundation, to provide financial assistance to the construction workers in Louisiana, Mississippi and Alabama who suffered financially from the disaster. AGC will work with the chapters in those states to establish criteria for eligibility, identify eligible victims and distribute contributions.
Many of the workers who are likely to benefit from this fund will be employed to participate in the clean-up and restoration of the cities and towns suffering damage.
Construction employment in the three states totaled nearly 275,000 in July, according to Bureau of Labor Statistics (Figures are only available statewide; large parts of each state were unaffected).
Many of these employees are without income in the short term while they are attempting to rebuild their homes and replace furniture, clothing and household goods for themselves and their families.
Contributions should be made to the AGC Education and Research Foundation at www.agc.org/donate or by mailing a check to the AGC Education and Research Foundation (Hurricane Katrina Construction Workers Fund)/ 333 John Carlyle Street, Suite 200/ Alexandria, VA 22314. All contributions are fully deductible charitable contributions.
Legislation introduced to protect contractors
Legislation was introduced in the U.S. House of Representatives that provides measured protections to contractors who repsond to declared federal, state and local emergencies or disasters.
“The Good Samaritan legislation is designed to provide contractors, such as those responding to Hurricane Katrina, with qualified immunity from liability when providing services in volunteer situations that arise from a disaster or emergency,” says AGC CEO Stephen E. Sandherr. “When construction expertise is needed, there should not be anything to make the construction industry hesitant in responding to help and possibly saving lives and property.”
Specifically, the bill would provide constuction entities with immunity from liability for negligence when providing services or equipment on a volunteer basis in repsonse to a declared emergency or disaster. It would not cover gross negligence or willful misconduct. Moreover, those protected under the bill would be providing such assistance at the direction of a public official acting in an official capacity.
New vision needed to meet growing needs, says ARTBA president
America’s transportation network is at a crossroads and meeting the challenges of the future will require policymakers at all levels of government to develop and embrace a new approach to transportation planning if the United States is to remain globally competitive, the American Road & Transportation Builders Association’s (ARTBA) top executive says.
ARTBA President & CEO Pete Ruane, who has more than 35 years of experience in the economic development, transportation and construction fields, delivered his remarks at the 8th Annual Texas Transportation Summit in Irving during a keynote address about the new highway/transit reauthorization law.
The Safe, Accountable, Flexible, Efficient, Transportation Equity Act — A Legacy for Users (SAFETEA-LU) — which was signed into law by President Bush August 10, is a step in the right direction, Ruane says, but will not come close to meeting the nation’s highway/transit needs identified in repeated government reports.
“The costs of improving and modernizing America’s transportation systems will be significant, but the costs of doing nothing for future U.S. economic growth, traffic congestion and air pollution levels and highway safety are far greater,” Ruane says. “President Eisenhower embraced a vision for transportation 50 years ago when he created the Interstate Highway System. It’s now time for policymakers and the President to formulate a new transportation vision for the next 50 years. It can be done, but it’s going to take the unprecedented involvement and leadership of the business community and political will by Congress.”
Adjusted for inflation, SAFETEA’s average annual funding gains are only 1.8 percent, compared to the real increases of six percent annually in the previous law — TEA-21. Traffic congestion levels will increasingly threaten business productivity and just-in-time delivery. There is also unlikely to be reduction in highway fatalities under the new law, ARTBA says.
With the U.S. population projected to increase 45 percent to more than 415 million people and the number of licensed drivers to grow another 86 percent to more than 380 million drivers over the next 50 years, there are a number of things policymakers should be considering to meet the nation’s transportation challenges, the ARTBA president says.