It’s Official: Congress’s Next Spitting Contest Will Be Over the Gas Tax

Since the 112th Congress convened in January, the federal government almost shut down, the government almost defaulted on its debts, and the FAA was temporarily shuttered. It’s the Crisis Congress, thriving on the chaos of catastrophe. Next up: a bruising fight over funding the transportation system.

Grover Norquist wasn't content to just bring us to the brink of default. Photo by ##http://en.wikipedia.org/wiki/File:Grover_Norquist_by_Gage_Skidmore.jpg##Gage Skidmore##

A few weeks ago, Ben Smith at Politico mentioned in a short post that the gas tax was expiring September 30. If not extended, all but 4.3 cents of the 18.4-cent federal gas tax would disappear. Extending the gas tax has always been an easy, bipartisan move that happened more or less automatically. (Raising it to a reasonable level is another story entirely.)

When Smith first wrote about the gas tax expiration, it was the first some had heard of the issue. Others were monitoring it cautiously, just in case the Tea Party or other antitax crusaders decided to kick up a stir. But media reports confirm that those forces are preparing for battle.

House Transportation Committee Chair John Mica has proposed a bill based on the current gas tax, and his office has confirmed that he supports keeping it at 18.4 cents. But according to Platts news service, Republican members on key committees are “still deciding what to do about the federal gasoline tax.”

The demigod of the tax-haters, Grover Norquist, has decided to take up the banner, after enough news organizations asked if he was going to. “ATR will be urging people to look at ending the federal gas tax either cold turkey or phasing it out as soon as possible and allowing states to simply go raise their own taxes, rather than send the money to Washington and get it back with strings,” Norquist told Platts in an email.

Even other right-wing small-government types part company with Norquist there. Politico quotes Heritage Foundation and Reason Foundation experts as saying the gas tax “has to” be renewed and that a “cold turkey” end to the gas tax, as Norquist appears to be pondering, would be “chaotic.”

That seems to be fine by Rep. Joe Wilson (R-SC) of “You lie!” fame. (Chaos is sort of his thing.) His local TV network, WJBF, quotes Wilson as questioning the federal gas tax. “Sadly, it has been used in large cities to subside a transportation system, the subway systems of New York, Chicago, San Francisco. We need to look at this carefully. And, I believe the money should be spent where it is raised and that is by the drivers of Georgia and South Carolina.”

Oregon Democrat Peter DeFazio doesn’t put it past the GOP to play politics with the most basic funding mechanism of our already-crumbling transportation system. “The Republicans will use the expiration of the program and the tax… for some sort of leverage or further blackmail,” said DeFazio, the top Democrat on the House Transportation Subcommittee on Highways and Transit. “If the ultra-right prevails, it has already been rumored they would end the gas tax, which would mean no more surface transportation trust fund.”

Gas tax receipts are up this year, according to the FHWA, generating about $22 billion so far in fiscal 2011, compared to a total $32 billion for all of FY 2010, says Platts. Gas taxes make up 90 percent of the balance of the Highway Trust Fund.

Meanwhile, Republican Sens. Kay Bailey Hutchison and Tom Coburn, as well as Reps. Jeff Flake and James Lankford, have introduced separate bills to drastically alter the way gas taxes are collected and distributed. They would rather a system more to the liking of Rep. Wilson, with states keeping their own gas tax money and spending it as they see fit, rather than sending it to Washington and then getting it back.

“Donor” states complain when they don’t get back as much as they sent. Indeed, Wilson’s home state only got back 85 cents on the dollar in 2009. But that money wasn’t primarily going to New York and San Francisco. Alaska was raking in $3.70 for every dollar it shelled out. Montana and North Dakota also took back more than twice what they sent. (That information is from the Heritage Foundation, by the way [PDF].)

Of course, asking states to take on more of the burden for raising transportation revenues might assuage some small-government types, but asking a bunch of cash-strapped states to take this on in the middle of a recession is rough stuff. And it’ll just turn states into the next battleground for tax foes.

The same argument even Democrats use to justify not raising the gas tax is the same argument some will wield in defending the idea of repealing it altogether. Doug Heye, former spokesman for the Republican National Committee, told Politico that gas prices are “really affecting families. If you have to drive 20 miles to work every day, those are real costs.” He predicted that “there will be Republicans who will be resistant” to renewing the tax.

As CNNMoney said at the beginning of its story on the brewing fight, “You may want to consider investing in some good shock absorbers for your car this fall.” (Make that “knobby tires for your bike,” Streetsbloggers.) After all, if gas tax receipts fall, road maintenance – already miserably underfunded – will suffer even more.

  • Paul in Vancuver, WA

    It is scary and given the political climate, I am not very optimistic that a ‘good’ bill will be passed, but some serious reworking of the gas tax would be worthwhile.  For most states sending all the federal money to WA and then competing for pork to get it back with DOT strings attached doesn’t really make senses.  From a complete streets perspective and it means that those dollars get spent mainly on monstrous freeway projects like the Columbia River Crossing between Portland, OR and Vancouver, WA.  A more sensible approach to the CRC project is rejected out of hand because it would require seeking USDOT funds for several smaller projects and some parts would not be USDOT eligible.  So the local communities are forced into a massively stupid project.  As noted, this is local gas tax dollars sent to the Feds and then passed back down.

    On the other hand some federal involvement is necessary for states like Alaska, Montana and Wyoming that don’t have the population or economy to build good highways without subsidy.  It is hard for the urban areas to swallow, but if trucks are going to haul products across the country and families are going to drive on vacation to national parks and the Rocky Mountains then there needs to be some federal redistribution of transportation and highway dollars.  Also, in more rural areas it is helpful to have federal encouragement of complete streets. 

  • Ian Dutton

    Does this mean we can roll up our interstate highways and reconsider how we’re using the land underneath them?

  • Felice Farber

    During the 1970’s fiscal crisis, there was talk about New York City seceding from the state.  Maybe it’s time for New York to start a movement to disband the federal government and save the $245 billion in federal income taxes New Yorkers pay – second highest in the nation. With a return rate of only 77 cents on the dollar – it’s time to demand a refund of the $56 billion we pay each year that finds its way to other states. We could solve all of New York’s financial woes and adequately fund our infrastructure investments if we kept our money in the state.

  • Josh

    HAAAAAAAA!  It’s hilarious that he thinks any federal tax dollars from the south are going to support anything in NYC or SF or Chicago.  Let’s do it.  Let’s fix this while we’re at it:

    http://www.taxfoundation.org/research/show/266.html

    Earth to Joe Wilson:  federal redistribution of money HELPS your constituents, and you’re WHINING about it.

  • Josh

    HAAAAAAAA!  It’s hilarious that he thinks any federal tax dollars from the south are going to support anything in NYC or SF or Chicago.  Let’s do it.  Let’s fix this while we’re at it:

    http://www.taxfoundation.org/research/show/266.html

    Earth to Joe Wilson:  federal redistribution of money HELPS your constituents, and you’re WHINING about it.

  • Anonymous

    Wilson would then prefer to split it to the City level, making it great for richer cities in his state and REALLY making things impossible for the poorer ones.

  • Todd Scott

    According to a GAO study, South Carolina received $1.04 for each dollar in fuel tax from FY2005-2008. 

    http://www.gao.gov/new.items/d10780.pdf

    Today there are no donor states because Congress is adding general fund dollars to the Trust Fund. Didn’t they add $7 billion for FY2009?
    http://www.fhwa.dot.gov/policyinformation/statistics/2008/pdf/fe10_2009.pdf

  • Masonic will be the death…

    Let Grover, Wilson and Co. win on the gas tax. It will only result in states raising and implementing more tolls on bridges and freeways for the zealots to complain about, and block. That is until another car and truck laden bridge collapses.

    Drivers don’t get it, they need to pay for the use of the roads built for them. Pay for it with a gas tax or tolls as a driver you are still going to pay.

    Once you are resigned to the reality that they can’t be stopped it becomes kind of funny watching anti-tax tea party zealots eat themselves.

  • I say the dems should back off and let the Rs run rampant on this one.  More money would go back to the most urbanized states under this scheme, which would presumably benefit their transit systems since the governor would be swayed by city interests to spend more money on their needs. 

    One conflict area is with interstate areas like KC, DC, NYC, Portland, Philly, and anywhere else where a quick drive over a state line might get you a significant discount on gas prices if one neighboring state doesn’t decide to raise their taxes so gas is a similar price.  We see this already in DC where MD and VA have substantially lower prices, and you might save $1 – $3 per tank of gas if you just drive over a bridge. 

    I think this could also shake loose some of the holdups on doing congestion pricing since without fed funding, states could say “you want to drive our roads, you pay to get past our border”.  It’s sort of antithetical to the Eisenhower concept of a national system, but then again, it’s the Rs steering it that way.

  • Cal2neb

    Does Grover Norquist not know that people in Iowa want to sell things to people in Colorado? Nebraska has a lot of road, and few people. That’s why some road money needs to come from the Feds – even with strings.

  • Anonymous

    From the report linked by Todd Scott, the beneficiaries wouldn’t necessarily be the urbanized states so much, so it’s probably best to temper your schadenfreude. Surprisingly, NY and other New England states would be hurt a fair bit. Montana and its neighbors would certainly be hurt, so they and other states with “a lot of road and few people” would probably have to toll through traffic.

    On the whole, though, I think it might promote better spending. It seems to me that when the federal government is paying for projects it really encourages states and local areas to approve something, anything, just to get their hands on some of that money. If they were paying themselves, there would probably be fewer megaprojects and more maintenance.

  • Having lived in Canada for nine years in which there was almost no Federal highway program, I can testify that we got along fine.  Of course, going cold turkey in the U.S. would be traumatic.  I can’t imagine this Congress tackling something as complex as an orderly, non-destructive withdrawal from highways and transit.
     
    What is most interesting would be to watch what I would call the “infrastructure Republicans” — an element that goes back to Abraham Lincoln – deal with the rise of the other element, which seems to go back to Jefferson Davis.  The Federalization of transport programs in the U.S. was a bipartisan project and it includes a considerable amount of legislation and case law that would hold back the states from carrying out programs on their own, even if they have the funding.  For example, the Transportation Act of 1958 took the regulation of rail passenger service into Federal hands for all but the smaller operations.  Laws like that, as well as the imposition of national standards for trucks, meet the needs of big businesses for uniformity.  And, it’s more cost-effective to buy Congress than 50 plus legislatures, sovereign Native American councils, etc.

    What may appeal to the Grover Norquists as a consequence of a funding cut-off is that at the state level, Colorado conservatives set up the highway program to begin taking money out of the general fund in order to avoid raising the gas tax.  This creates pressure to cut social and educational programs. A sudden end to Federal highway programs would be the ideal way to have this approach occur all over the country in lieu of restructuring state highway taxes.

    So, this could be quite a roll of the dice.  If they come up right, social service budgets all over the country are hit with another squeeze as state budgets are readjusted.  Democrats who  owe their seats to construction unions would join with Republicans to keep infrastructure projects rolling at the expense of other programs.

    If they come up wrong, this could be the end of Grover Norquist as he faces off against the highway lobby which supported some of the same people he would be counting on for votes.

    When 92% Federal funding came to my native Oregon, the lure of obtaining the “free” money did as the highway lobby expected = common sense was thrown out the window.  The attached 1963 photo shows how concrete forms were pitched into the Willamette River in order to press ahead with construction of the East Bank Freeway (I-5).  The states eagerly gave up their sovereignty and simply hacking at the Federal tax will not give it back.

    My thought is that Mr. Norquist will enjoy toying with this threat, but not be so foolish as to try to force his votes in Congress to choose sides against the national highway lobby.

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