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Gasoline prices are climbing, nudging $3 a gallon in Ohio. If a politician was bent on self-preservation, this would not be the best time to propose a tax that would raise the price a little more.
But before you suggest firing U.S. Sen. George Voinovich, remember that he’s retiring at the end of the year. Before then, the Ohio Republican wants to start raising the federal gasoline tax by 25 cents -- one cent a month, for 25 months. This would create more than 750,000 jobs by funding road and bridge construction projects, he says, and a portion of the tax could be used to reduce the federal deficit.
The general proposal is not new; Voinovich has been pushing it for months. But Voinovich and a Democrat, Sen. Tom Carper of Delaware, trotted it out again on Nov. 5 with a letter to the co-chairmen of the National Commission on Fiscal Responsibility and Reform. The commission, appointed by President Barack Obama, is working toward a Dec. 1 deadline on a proposal to reduce the deficit and address looming fiscal issues.
It is not PolitiFact’s mission to say whether Voinovich’s proposal is sound, though there are opponents to his idea. Nor will we take bets on the likelihood of it passing in the very short time Voinovich has left in office. But in a news release announcing the letter, Voinovich on Nov. 8 stressed that the federal fuel tax has not been raised since 1993.
Seventeen years without an increase seems like a long time. Has it really been that long?
According to the Congressional Research Service, it has.
The reasons include not only the long-term nature of highway funding bills and the projects they pay for, requiring years of planning, but also a political distaste among many lawmakers for higher gasoline taxes.
Some key dates in the heated history of fuel taxes provide a sense of the challenge. These come from the Congressional Research Service, which provides in-depth analysis for both houses of Congress:
- 1932: The federal government levied its first fuel tax, at 1 cent per gallon.
- 1941: The federal tax became permanent under the Revenue Act of 1941.
- 1973 to 1980: Presidents Richard Nixon, Gerald Ford and Jimmy Carter considered gas taxes for a variety of reasons, from fighting inflation to spurring alternative energy development to reducing oil imports. None of these increases passed Congress.
- 1982: President Ronald Reagan proposed a gas tax to improve the nation’s highways, and Congress agreed. This raised the tax from 4 cents a gallon to 9 cents a gallon. Reagan was a hero to many conservatives, and Voinovich has cited Reagan’s gas-tax initiative while arguing for his own.
- 1990: With President George H. W. Bush’s signature, Congress raised the gasoline tax to 14.1 cents a gallon, saying it would reduce the federal deficit.
- 1993: President Bill Clinton failed to get support for a broader energy tax, but Congress passed an alternative, raising the gasoline tax to 18.4 cents a gallon. The purpose was deficit reduction.
That’s where the tax stands today: 18.4 cents a gallon. It is charged to refiners but passed along to consumers at the pump. The good news for drivers is that the tax stays flat regardless of how much they pay for gasoline. If the per-gallon price at the pump is $2.00, it includes 18.4 cents worth of federal gasoline taxes. If the price jumps to $3 a gallon, the federal gas tax share is still only 18.4 cents.
But Congressional Budget Office projections show that the 18.4 cents a gallon isn’t enough to keep pace with planned highway and transit projects, let alone with the possible rate of inflation. That’s even before considering proposals like Voinovich’s to ramp up road and bridge repairs. "The Interstate Highway System is more than 50 years old and many roadways and bridges are reaching the end of their useful life," he and Carper wrote in their letter to the fiscal reform commission.
Starting in 2014, the Highway Trust Fund will go into the red, according to CBO projections, which note that its figures are strictly for illustrative purposes -- because under law, the fund is not allowed to incur negative balances. Unless the gas tax is raised or highway projects cut, the fund will have to draw money from the general treasury, with negative budgetary consequences, CBO figures show.
Voinovich notes that that has happened before -- in 2008, 2009 and this year. Altogether, Congress had to transfer $34.5 billion from the general treasury so it could maintain a positive balance in the Highway Trust Fund. The fund fell short those years because of the recession and the high cost of gasoline -- Americans cut out some of their driving -- and from better fuel efficiency, which reduced gasoline consumption. While arguably good for the environment, this created a shortfall for the fund that pays for highway repairs.
The trust fund needs $34 billion over the next six years, Voinovich says, and if it doesn’t get it from gasoline taxes, Americans will face the choice of higher deficits or fewer road repairs -- which in turn "will create additional unemployment and continued deterioration of infrastructure."
The Congressional Research Service agreed with the need in general, saying in an April 2010 report: "The Highway Trust Fund is in need of an increase in funding."
But the report ended with a dose of political reality: "However, a gasoline tax increase is also likely to be unpopular with consumers. It might also drain purchasing power, especially from an economy that is weakened by recession."
Voinovich has a difficult case to make. He’s been pushing it for months. But he’ll apparently have some sympathy from the debt commission; in a draft report released Wednesday, Nov. 10, the commission proposed a higher gasoline tax -- raising it gradually by 15 cents beginning in 2013 -- as a way to pay for transportation improvements without raiding the general government treasury.
That’s less than Voinovich proposed, and it’s unknown if the provision will be included in the commission’s final report. Also unknown is whether a super-majority of the commission will agree with the full extent of commission proposals -- which include an array of discretionary spending cuts and an eventual raise in the Social Security retirement age -- and whether Congress then will approve the recommendations or shelve them, putting off decisions for another day or year.
But when it comes to the history of gas-tax hikes, the facts are on Voinovich’s side, so we rate his statement True.
Sens. George Voinovich and Tom Carper, letter to the National Commission on Fiscal Responsibility and Reform, Nov. 5, 2010
Sen. George Voinovich, "Senators Voinovich and Carper Ask Debt Commission to Consider Raising Gas Tax" news release, Nov. 8, 2010
Sen. George Voinovich, "Senator Voinovich calls on President Obama to Make Good on Infrastructure Promises" news release, Nov. 4, 2010
Congressional Budget Office report, June 2010
Congressional Research Service, "The Role of Federal Gasoline Excise Taxes in Public Policy," April 15, 2010
Congressional Research Service, "The Federal Excise Tax on Gasoline and the Highway trust Fund: A Short History," updated April 4, 2006
"Draft Proposal from the National Commission on Fiscal Responsibility and Reform," New York Times, 11-10-2010
"How to slash the state: 14 ways to dismantle a monstrous government,one program at a time," Reason.com, Nov. 1, 2010
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