Why a gas tax increase might be a good idea

Why a gas tax increase might be a good idea


Save Story
Leer en español

Estimated read time: 3-4 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

The idea is counter intuitive: Pass a gas tax increase in the midst of a financial crisis?

Utah’s Legislature will reconvene this week to consider an override of SB 229 that would send 30 percent of new sales tax revenues — an estimated $60 million infusion — to transportation. Gov. Gary Herbert vetoed the bill, but now faces an override of his veto.

Herbert says funneling sales tax revenues to transportation is not the solution. However, the governor is also opposed to raising the gas tax — at least for now. He has made public statements in recent weeks that indicate he might be open to a gas tax increase in 2013.

The bill's sponsor, Sen. Stuart Adams (D-Layton), said he proposed the sales tax earmark to avoid or at least postpone, a gas tax increase.

However, the idea of a gas tax increase is not a bad one.

President Barack Obama’s bipartisan National Commission on Fiscal Responsibility and Reform recommended a gas tax increase at the federal level last December when it issued its report to America.

The financial experts who came up with this recommendation made this argument: The current transportation trust fund is falling behind the government’s outlays, requiring transfers from the general fund to cover transportation costs. The commission called for additional gas tax revenues to be dedicated to fully funding the transportation trust funds and therefore eliminating the need for further general fund bailouts.

Related:

In addition to the increase, the commission called for changing the current system where legislators are able to use gimmicks to circumvent budget limits to increase spending. The commission plan reclassifies spending from the Transportation Trust Fund to make both contract authority and outlays mandatory and then limits spending to actual revenues collected by the trust fund in the prior year once the gas tax is fully phased in.

Imagine that, only spending what we take in.

The commission also recommended significant reforms to control federal highway spending. The commission said Congress should limit trust-fund spending to the most pressing infrastructure needs rather than forcing states to fund low-priority projects. It should also end the practice of highway authorization earmarks.

Members of the commission included lawmakers from both sides of the aisle as well as representatives from industry and private sector think tanks.

To look at the issue in context, consider that gas prices shot up to an average of $3.70 per gallon in Utah this week as gas prices hit a two-year high nationally. Some experts are predicting gas at $5 per gallon this summer.

Then factor in growth – Utah and many other states will keep growing, creating more and more need for additional highways and transit lines to move people.

But how do we pay for it? The national commission proposed a 15 cent per gallon increase starting in 2013, phased in at one cent every three months until the 15-cent increase had been reached.

No one wants to pay more for anything these days. But a gas tax is a user fee. If I am a heavy user of the highway network I should have to pay for needed transportation improvements. If I don’t drive or drive only a few miles each day, I will only pay for what I use.

SB229 will probably pass in override session this week, providing a boost to transportation funding. As much as it will help the situation, the $60 million from sales tax revenue will not solve the problem. A long-term solution to transportation funding at both the state and federal levels will remain a pressing need.

David Fierro is a communications consultant who resides in Salt Lake City. He specializes in transportation and produces the Utah Transportation Report: www.utahtransportationreport.com.

Related stories

Most recent Utah stories

Related topics

UtahPolitics
David Fierro

    STAY IN THE KNOW

    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the KSL.com Trending 5.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast