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Tolling Points

Long-Ago Gas Tax Increase Inspires Memories of Groundhog Day Movie

By: 
Bill Cramer

The next time you’re looking for a cultural icon that crosses partisan lines, look no farther than the message the Institute on Taxation and Economic Policy (ITEP) came up with last month to mark the 25th anniversary of the last increase in the U.S. federal gas tax.

In that week, National Public Radio reporter David Schaper recalls, “many of us were watching Seinfeld and the first Roseanne or listening to a Mariah Carey cassette on our Walkman. And one of the top movies that year starred Bill Murray as a TV weatherman, who relives the same day, Groundhog Day, over and over and over again.”

For ITEP Research Director Carl Davis, the parallel was obvious. "Bill Murray's character [is] getting caught in a time loop," he told Schaper. "Those of us that have followed this gas tax debate can't help but feel some of that same repetition.”

Funding Must Be Sustainable

The problem—as Davis pointed out, and as every surface transportation professional knows—is that the incoming tax revenue has remained more or less static for a quarter-century, while its purchasing power has steadily eroded.

"The whole reason this tax exists is to keep our roads paved and to keep our bridges from falling down," he said. "To do that effectively, it needs to collect a sustainable amount of revenue over time to cover the cost of paving roads and maintaining bridges, and it can't do that if it's just not updated for decades at a time."

Between rising costs and increasingly fuel-efficient vehicles, "we've seen the purchasing power of the gas tax sliced by almost two-thirds,” he added. Illinois Secretary of Transportation Randy Blankenhorn put it a different way.

"Honestly, the last time they raised the gas tax, if they would have indexed it to inflation, it would be almost twice as much now," he told Schaper. "We're losing revenue every day just because of inflation.”

State Governments Step Up

The NPR story picks up on a trend we’ve been watching closely at IBTTA: since 2010, 33 of the 50 states have raised their own gas taxes, and two more could be on their way to doing so. And some of them are indeed indexing their gas taxes to inflation to accommodate rising construction costs over time, according to Kevin Pula, senior transportation policy specialist for the National Conference of State Legislatures.

But at the federal level, Schaper says it’s Groundhog Day all over again.

“Congress does hold hearings from time to time to explore ways to increase funding for transportation, where raising the gas tax and alternative revenue sources are debated and discussed, but there's almost never a vote,” he writes. It points to the need for a full toolbox of funding options, from private and public sectors and all levels of government, to deliver the mobility and safety that citizens expect and deserve.

Once again, there is talk in Congress of raising the gas tax. Time will tell if the President, his party and the Democratic controlled House of Representatives can actually vote on an increase in the federal gas tax. And, if it is an amount that will truly make a difference, or will it be Groundhog Day all over again?

It takes a toolbox of solutions to fund a modern surface transportation system! Save the date for IBTTA’s Summit on Finance & Policy, May 19-21, 2019 in Philadelphia, to stay up to speed.