Federal Gas Tax Set to Expire September 30

From the “in case transportation folks didn’t already have enough to worry about department”: Yesterday I blogged about how a potential failure to raise the debt ceiling might impact transportation funding and about how a lack of momentum for a new transportation authorization bill combined with a toxic political atmosphere in Washington will make getting a new authorization in place by September 30 (when the latest SAFETEA-LU extension expires) extremely difficult. While another temporary extension of SAFETEA-LU might be an option, even that’s not a given in light of last week’s failure by lawmakers to reach agreement on a temporary extension of the Federal Aviation Administration, which forced a partial shutdown of the agency. But September 30 is a key looming deadline for another reason as well: that’s the day the federal gas tax, or at least most of it, expires.

Politico’s Ben Smith reported this week that the gas tax is among a list of tax measures that would have to be renewed by Congress for them to still be in effect on October 1. Here’s the list:

  • All but 4.3 cents-per-gallon of the taxes on gasoline, diesel fuel, kerosene and alternative fuels. The federal tax on gasoline is 18.4 cents per gallon.
  • Reduced rate of tax on partially exempt methanol or ethanol fuel.
  • Tax on retail sale of heavy highway vehicles.
  • Tax on heavy truck tires.
  • Annual use tax on heavy highway vehicles.

What would in a normal year be an “utterly routine” renewal, as Smith puts it, might not be in the current political environment in the Nation’s Capital. That’s left many transportation advocates holding their breath, hoping a renewal can sail through under the radar and not attract the attention of tax-cutting lawmakers.

Tanya Snyder on Streetsblog Capitol Hill argues that the current gas tax is already too low to keep the Highway Trust Fund solvent and increasing the tax has been a political non-starter. But just imagine the impact to states and transportation projects around the country if Americans were suddenly paying 14 cents less per gallon.

“Indeed, as advocates have pushed (to no avail) for a higher gas tax to fund the nation’s transportation needs, they may now find themselves having to defend the too-low tax we now have,” Snyder writes.

Video Explains the Gas Tax

There’s a great little four-minute YouTube video called “Understanding the Gas Tax” that explains in simple terms how it works, how it helps fund transportation projects across the country, how America’s infrastructure investment level compares to that of other countries, why the Highway Trust Fund is in trouble and the gas tax can’t keep up, and the importance of infrastructure to our economy—all in four minutes. It comes from Pavia Systems, a company that produces web-based training programs for the asphalt industry.