Motorists’ Efficiency Might Drive Taxes Up

Posted May 20, 2015 at 3:36pm

The problem Congress faces in paying for new highways and other transportation projects is that the Highway Trust Fund, which for decades has financed road and transit spending, is running out of revenue.

The reason is that Americans are buying more fuel efficient vehicles, which require less gasoline. In some cases, they also are driving fewer miles.

Because taxes in general are unpopular, and the gas tax is particularly loathsome to many motorists, raising the tax to generate more income for the trust fund has gotten nowhere on Capitol Hill.

The federal gas tax — states set their own levies — has been 18.4 cents per gallon since 1993. A separate mass transit account of the Highway Trust Fund was created in 1983. Today, it receives 16 percent of gas tax revenues.

Congress’ solution has been to periodically transfer some money from the general Treasury to the Highway Trust Fund to keep it running.

Since 2008, lawmakers have transferred $53.6 billion in this manner. The nearly $11 billion patch Congress provided for the Highway Trust Fund at the end of last July effectively extended the most recent highway bill until the end of May.