Compliance News / Compliance

Gas Tax May Double in 2014

Bill to be Introduced Today

December 4, 2013
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A proposal to nearly double the federal gas tax is slated to be introduced Wednesday, December 4, by Rep. Earl Blumenauer (D-Ore). The federal gas tax currently is 18.4-cents-per-gallon. If Rep. Blumenauer has his way, it would skyrocket 15 cent per gallon to 33.4 cents per gallon in 2014.  This would be the first gas tax increase since 1993, when it was increased 4.3 cents per gallon.

This proposal, known as the Update Act of 2013, turns the recommendations of the Simpson-Bowles report, the National Surface Transportation Policy and Revenue Commission, and the National Surface Transportation Financing Commission into proposed law

According to Rep. Blumenauer, the tax hike is needed to stem the erosion of the Highway Trust Fund. The current tax raises approximately $35 billion each year, but repairing the current infrastructure costs about $54 billion annually. As he explains in a press release introducing the Update Act of 2013, “Our transportation infrastructure is increasingly outdated and inadequate. In 2009, the Federal Highway Administration estimated that over $70.9 billion worth of repairs were needed just to maintain safe infrastructure; that number has since increased. In order to fund all economically justified projects, the Department of Transportation estimates that Congress would need to provide $83 billion a year in addition to current funding. The American Society of Civil Engineers estimates that our surface transportation needs over $2 trillion of investment in order to remain economically competitive.

“When the current surface transportation authorization ends at the end of Fiscal Year 2014, Trust Fund balances will nearly be exhausted,” Rep. Blumenauer stresses. “To maintain current funding in the following years, the Highway Trust Fund will need almost $15 billion a year (in addition to current gas tax receipts). If we do not find a way to make the Highway Trust Fund solvent, the continued disinvestment will mean an over 30% drop in federal transportation spending by 2024.”

The tax hike may be a transitory measure as the U.S. develops a more sustainable solution. The Congressman’s ultimate goal, he says, is to replace the per gallon tax with a tax based upon mileage driven. He introduced legislation earlier to study that approach, piggybacking with research already conducted in Oregon.

 The bill has the support of the Transportation Trades Department of the AFL-CIO, the American Public Transportation Association, the transportation and infrastructure division of the Chamber of Commerce and Associated General Contractors of America. 

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