Exploring a federal gas tax increase

Infrastructure proponents have used the 20th anniversary of the last federal gas tax increase, which occurred Oct. 1, 1993, as a platform to generate discussion about the need for another gas tax increase. The last hike raised the federal gas tax to 18.4 cents, and with such a shortfall in federal transportation funding today, infrastructure proponents see a gas tax hike as reasonable and long overdue considering the last increase occurred nearly three administrations ago.

Ray LaHood, the former transportation secretary, is one advocate of a tax increase. According to WAMU 88.5, a radio station in Washington, D.C., LaHood called for a 10-cent-per-gallon tax increase at a forum on next-generation transportation systems. Chamber of Commerce President Thomas Donohue, another national figure, also recently called for a gas tax increase.

Some aggregate producers believe a gas tax increase is in order, too. Scott Alexander, president of Avenrock Materials in the Nashville, Tenn., area, recognizes a gas tax increase as a possible solution. But, Alexander, like many of his industry peers, realizes a tax hike is an unrealistic proposition.

“There is no appetite for any politician to push through an additional tax, even though it may not be felt by the voters,” Alexander said recently at the Pit & Quarry Roundtable in Ft. Myers, Fla. “It’s perception more than anything, and, as an industry, we can sit there and beat the drum about how important it is and maybe how logical it is to increase the tax and how that’s going to turn everything around, but who is going to listen? The politicians don’t seem to. Washington doesn’t seem to be.

“It’s that age-old problem: You can talk to your local senator [and] representative; you can go lobby in D.C. and they all listen; but they don’t do anything.”

John Garrison, market area director at Terex Minerals Processing Systems, shares Alexander’s view.

“I don’t see the government coming together to agree on a gas tax increase,” he says. “Nobody wants to assign their name to raising taxes, so there’s going to have to be some sort of other creative way – another usage tax [or] fees – to generate that. Maybe it’s going to have to come from multiple sources to make it happen.”

An April 2013 Gallup poll supports the theory that Congress won’t touch the federal gas tax with a 10-ft. pole. According to CNN, the Gallup poll found that 66 percent of Americans would oppose a law in their own state that would increase the gax tax by 20 cents to fund road and bridge projects.

Eight states – California, Connecticut, Georgia, Kentucky, Maryland, Nebraska, North Carolina and Wyoming – did raise their gas taxes in a one-week span earlier this year. The largest increase was a 10-cent increase in Wyoming, offering some promise but also the realization that a truly impactful tax increase is unlikely to come.

“Twenty years. It’s been 20 years since we had an increase in the federal fuel tax,” Donohue said, according to CNN Money. “What kind of car were you driving 20 years ago?”