Cutting Gasoline Tax May Threaten Highway Funding

The Road Information Program (TRIP) and the American Public Transportation Association (APTA) are warning that a proposed reduction in the federal motor fuel tax by $0.043 per gallon would slice approximately $7 billion annually from highway funding – causing an overall annual economic impact of $40 billion. TRIP and APTA yesterday said cutting $0.043 from the $0.184 per-gallon federal motor fuel

The Road Information Program (TRIP) and the American Public Transportation Association (APTA) are warning that a proposed reduction in the federal motor fuel tax by $0.043 per gallon would slice approximately $7 billion annually from highway funding – causing an overall annual economic impact of $40 billion.

TRIP and APTA yesterday said cutting $0.043 from the $0.184 per-gallon federal motor fuel tax would result in a loss of approximately $7 billion in reduced transportation revenues annually that are used to support more than 200,000 jobs nationwide. The number of jobs is based on a U.S. Department of Transportation (DOT) calculation that each $1 billion in transportation dollars provides funding that supports 42,000 jobs per year.

The ripple effect of that funding reduction, an estimated $40 billion a year, comes from a DOT report showing that the average benefit for each $1 spent on road or transit construction is about $6 in reduced congestion, improved highway safety, reduced road and vehicle maintenance costs and lost transit benefits.

The money from the federal gasoline tax goes into the Highway Trust Fund specifically for needed highway and public transportation repairs and improvements under the Transportation Equity Act for the 21st Century, which was approved by Congress in 1998, said the two lobbying groups. They pointed out that Americans pay $78 billion a year in wasted time and extra fuel consumption while stuck in traffic congestion and some $42 billion a year in extra vehicle operating costs to drive on roads that need repair.

The groups added that some 30% of the country’s major roads and bridges need repair or improvement and that 29% of bridges are either structurally deficient or functionally obsolete. TRIP and APTA also pointed out that the DOT estimates it needs some $17 billion annually to maintain and improve public transportation.

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