I've gotten whiplash over the last few weeks doing double takes at the price boards at local gas stations. A month ago, I could get a gallon of regular for $3.09 here in Austin, Texas. Now it's $3.55 at my local pit stop place.
And if I happen across a place where gas is cheaper, I hit the brakes and turn into the station to top off my tank. That's probably a good idea for a couple of reasons.
First, the U.S. Department of Energy projected a month ago that a gallon of regular would average $3.44 per gallon. Now, the Department's latest Short-Term Energy Outlook expects a gallon of gas to be 11 cents higher.
Fuel tax stuck in the '90s
The second reason to pay attention to gas prices is that we might finally get a hike in federal fuel taxes. The federal excise tax on gasoline is 18.4 cents per gallon. It's been stuck at that level since 1993. Meanwhile, the cost to build and repair U.S. highways, for which the gas tax money is dedicated, has gone up over the last 20 years.
So there's been some rumbling on Capitol Hill about increasing the federal fuel tax rates (diesel is taxed by Uncle Sam at 24.4 cents per gallon).
The possibility of a higher federal gasoline tax comes up periodically.
In 2010, President Barack Obama's special bipartisan deficit reduction panel, the National Commission on Fiscal Responsibility and Reform, recommended a 15 cent-a-gallon gas tax hike in its draft report. The commission's full tax reform proposal never made it past the preliminary stage.
A gas tax increase was most recently was addressed, albeit in behind the scenes talks, during "fiscal cliff" discussion late last year. At that time, the transportation sector brought up the idea of raising fuel taxes.
Folks who make their livings on the road want the country's infrastructure to be better. And they acknowledge that we have to pay a price to do that. This week, another major business group also expressed support for increased transportation taxes.
Chamber of Commerce surprises panel
On Feb. 13, U.S. Chamber of Commerce President Thomas Donohue told the House Committee on Transportation and Infrastructure that his group supports reasonable increases in gas taxes that are phased in and indexed to inflation.
Donohue's remarks were an elaboration on his written testimony, in which he said:
First, we're willing to pay to support public infrastructure. This includes paying more in user fees to shore up the Highway Trust Fund and ensure adequate investment. This is not a new position. The Chamber has been saying this to Congress every chance we can for years. We all know the dire condition of our highway and transit systems. It's going to take money to fix it -- it's that plain and simple. The money is running out, so we need to phase in a moderate increase in the gas tax over a number of years and index it to inflation. Shippers and truckers are all on board to pay a little more as long as the money goes to where it's needed.
Wow. The country's preeminent lobbying business group, one that traditionally supports Republican anti-tax lawmakers, is calling for a tax increase.
Could we soon see cats and dogs and Republicans and Democrats living together in harmony? I wouldn't go that far. But we all know that Donohue is right.
The next big question is: Are we all -- representatives, senators and American drivers of all political persuasions -- ready to accept that we have to pay at least a little more to get the roads and bridges and tunnels we want and need?
Infrastructure programs are an easy way to put people to work. Such projects got a boost from 2009 stimulus money. Since then, though, they lagged.
Obama cited our "aging infrastructure badly in need of repair" in his State of the Union address this week. To deal with it, he called for a "Fix It First" program that would focus on urgent repairs to roads, bridges and railways. The Congressional Budget Office has put a $50 billion price tag on this proposal.
With a Congress that goes through contortions on how to pay for federal projects, increased federal fuel taxes could be an easy way to help foot some of these necessary infrastructure bills.
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