Thursday, January 22, 2015

The Battle for Gas Tax Increase

By Gregg Laskoski - With WTI crude oil dipping below $50 per barrel and retail gasoline prices slipping lower and lower... it would be easy to enjoy the euphoria of pump prices more than $1 lower than last year if only politicians weren't so determined to take more money out of our pockets. 

Effective January 1, states like Maryland, Virginia and Pennsylvania are raising their state's respective gasoline taxes.  So in effect, even though the retail prices are declining, the state(s) and federal government each want more of the revenue going directly to them.  In California, it's an increase in the state's emissions tax that is being applied directly to the wholesale price of gasoline, so in effect, it's a hidden gas tax increase of a minimum 10 cents per gallon.  

Maryland gasoline and diesel taxes will go up by 2.9 cents per gal. each, raising the state tax on gasoline to 30.3 cents per gal., and 31.05 cents per gal. on diesel. 

Pennsylvania wholesale taxes on gasoline and diesel are set to rise 9.8 cents per gal. and 13.2 cents per gal., respectively.  The new state taxes will be 50.5 cents per gal., for gasoline and 64.2 cents per gal. on diesel.   

Virginia's gasoline tax climbs 5.1 cents per gal., from 11.1 cents per gal. to 16.2 cents per gal. 2015 marks the first time in 29 years that Virginia has raised its gasoline tax. 
In each state increases are expected to be passed along directly to consumers. 
Unfortunately, state tax increases newly implemented and those being debated in state legislatures may prove to be the tip of the tax iceberg. 

U.S. Senator John Thune (R-SD), a member of the Commerce, Science and Transportation Committee who is expected to become the Committee’s Chairman, appeared on Fox News Sunday alongside Sen. Bob Corker (R-TN) to discuss the new Republican Congress working with President Obama. 

Thune acknowledged that his committee will be considering an increase in the federal gas tax.  The current tax, 18.4 cents per gal. on gasoline and 24.4 cents per gal. on diesel, has not been increased since 1993.  And as a result, Thune said Congress must address a $100 billion shortfall in funding for highway transportation infrastructure.  

That could translate into a 12-cent increase in the federal tax, pushing it from 18.4 to 30.4 cents per gallon.

“The highway bill expires at the end of May and there’s about $100 billion shortfall of what it would take to fund the highway trust fund at the current level of operation, so obviously we’ve got to deal with it here,” said Thune.

When Thune was asked if a 12-cent federal gas tax increase was a viable consideration, he said, "“I don’t think we can take anything off the table at this point. I think it’s important to recognize that we have a problem, an issue that we need a solution for, and we need to look at all the possible ways out there in which we can address the challenge and address the problem.”

In the end, whether it's the federal gas tax that goes up or our state gas taxes, or perhaps both, only one thing is certain: the highways are ours.  And so are the repairs they need. They won't come cheap.

In Georgia 

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