“There’s a huge supply shock right now,” Doug Peterson, president and chief executive of McGraw Hill Financial, said recently at a panel discussion on financing infrastructure at the Bipartisan Policy Center in Washington. With prices at the pump dropping by more than $1 a gallon, he noted, the government could collect a few cents on every gallon and still leave consumers with more money in their wallets. “I think this is an opportunity that we have,” Mr. Peterson said, “to see if we could get a gas tax through.”
The last time the gasoline tax was raised was in 1993, and even that 4.3-cent-a-gallon increase was not initially dedicated to transportation repair and capital improvements, but rather was part of President Clinton’s budget-deficit reduction plan. That revenue stream was redirected to the federal Highway Trust Fund in 1997.
Back then, the 18.4-cent tax on every gallon represented about 16 percent of the pump price, said Aaron Klein, director of the Financial Regulatory Reform Initiative at the Bipartisan Policy Center and a former Treasury Department official. If the gas tax had kept pace with inflation it would be 30.1 cents today, he said.
A result is that the trust fund is facing an estimated $160 billion deficit over the next 10 years.
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