Article published by the Austin American Statesmen
Ready for an Obama gas tax break? TxDOT might not be
Ben Wear: Getting There
Sunday, July 10, 2011
President Barack Obama wants to give you a 50 percent break on your gas taxes.
You may not have heard about this startling news of a massive Democrat-sponsored tax cut, or realized you did. What was actually reported by The New York Times a week ago was that the Obama administration would like to require that new American cars and light trucks average 56.2 miles per gallon by 2025. That's about double the current requirement under federal law.
The proposal — industry experts said achieving that kind of engine efficiency is feasible with electric hybrids like the Toyota Prius and plug-in hybrid electrics — is still under negotiation and subject to change, the Times reported. The automotive industry frets that the vehicles might cost so much that consumers would turn up their noses, presumably hanging onto older cars longer.
But the average standard, right now about 28 mpg, is already set to increase to 34.1 mpg by 2016 under an agreement reached two years ago between the Obama administration and the car manufacturers. That's a 25 percent increase in fuel efficiency. Going anywhere close to the 56.2 mpg target by 2025 would be an enormous change.
Including to what you pay each year in gas taxes. And what the Texas Department of Transportation and the U.S. Treasury collect in gas tax revenue.
Which brings us to our Texas legislators, who dragged their spent selves out of Austin in late June after almost six months of lawmaking.
Hang on first for some math.
Let's say a Pflugerville physics schoolteacher drives 15,000 miles a year and, by coincidence, has a car that averages right at that 28 mpg existing standard. She would need 536 gallons to do that.
She pays both a state gasoline tax of 20 cents a gallon (which hasn't increased since 1991) and a federal gasoline tax of 18.4 cents a gallon (locked in since 1993). So her annual tax hit (paid invisibly at the pump) is $107 to the state and almost $99 to the feds. So, about $206 a year.
With a 56 mpg car, her total tax would be $103. Oh, and at $3.40 a gallon (and subtracting the gas taxes), she would save another $800 by buying half as much gasoline.
But here's the problem, from a statewide perspective. TxDOT, which gets about three-quarters of that state gas tax revenue and about the same percentage of what Texans pay in federal gas taxes (because a quarter of it, unfairly in the eyes of Texas officials, is then distributed to other states), would lose a couple of billion dollars a year. Ouch.
The gas tax has already lost about 50 percent of its purchasing power to inflation since the early 1990s. Now it would lose half of what's left to fuel efficiency. If you're scoring, that would mean TxDOT in 14 years could have, effectively, a quarter of what it was spending on Texas roads in 1990. Dodging potholes could become a sort of slalom sport.
The answer to all this, in the short run, would be to index the gas tax to some combination of inflation and fuel efficiency. The longer-term answer is to tax drivers based on mileage, rather than fuel usage, at a rate calculated to meet the state's transportation needs.
The current governor and the several legislatures he has presided over, however, have shown absolutely no inclination to do either of those things. But they are fond of building and repairing highways, so they've been patching over the shaky TxDOT revenue situation for the past decade by approving all sorts of borrowing. Billions of dollars of it.
Millions of 56 mpg vehicles rolling around Texas would make that dance much harder.
You think we've got a lot of toll roads now? Hang on. And squirrel away the money you save on the Obama gas tax cut and unbought gasoline.
You're going to need it.
For questions, tips or story ideas, contact Getting There at 445-3698 or bwear@statesman.com.
Ready for an Obama gas tax break? TxDOT might not be
Ben Wear: Getting There
Sunday, July 10, 2011
President Barack Obama wants to give you a 50 percent break on your gas taxes.
You may not have heard about this startling news of a massive Democrat-sponsored tax cut, or realized you did. What was actually reported by The New York Times a week ago was that the Obama administration would like to require that new American cars and light trucks average 56.2 miles per gallon by 2025. That's about double the current requirement under federal law.
The proposal — industry experts said achieving that kind of engine efficiency is feasible with electric hybrids like the Toyota Prius and plug-in hybrid electrics — is still under negotiation and subject to change, the Times reported. The automotive industry frets that the vehicles might cost so much that consumers would turn up their noses, presumably hanging onto older cars longer.
But the average standard, right now about 28 mpg, is already set to increase to 34.1 mpg by 2016 under an agreement reached two years ago between the Obama administration and the car manufacturers. That's a 25 percent increase in fuel efficiency. Going anywhere close to the 56.2 mpg target by 2025 would be an enormous change.
Including to what you pay each year in gas taxes. And what the Texas Department of Transportation and the U.S. Treasury collect in gas tax revenue.
Which brings us to our Texas legislators, who dragged their spent selves out of Austin in late June after almost six months of lawmaking.
Hang on first for some math.
Let's say a Pflugerville physics schoolteacher drives 15,000 miles a year and, by coincidence, has a car that averages right at that 28 mpg existing standard. She would need 536 gallons to do that.
She pays both a state gasoline tax of 20 cents a gallon (which hasn't increased since 1991) and a federal gasoline tax of 18.4 cents a gallon (locked in since 1993). So her annual tax hit (paid invisibly at the pump) is $107 to the state and almost $99 to the feds. So, about $206 a year.
With a 56 mpg car, her total tax would be $103. Oh, and at $3.40 a gallon (and subtracting the gas taxes), she would save another $800 by buying half as much gasoline.
But here's the problem, from a statewide perspective. TxDOT, which gets about three-quarters of that state gas tax revenue and about the same percentage of what Texans pay in federal gas taxes (because a quarter of it, unfairly in the eyes of Texas officials, is then distributed to other states), would lose a couple of billion dollars a year. Ouch.
The gas tax has already lost about 50 percent of its purchasing power to inflation since the early 1990s. Now it would lose half of what's left to fuel efficiency. If you're scoring, that would mean TxDOT in 14 years could have, effectively, a quarter of what it was spending on Texas roads in 1990. Dodging potholes could become a sort of slalom sport.
The answer to all this, in the short run, would be to index the gas tax to some combination of inflation and fuel efficiency. The longer-term answer is to tax drivers based on mileage, rather than fuel usage, at a rate calculated to meet the state's transportation needs.
The current governor and the several legislatures he has presided over, however, have shown absolutely no inclination to do either of those things. But they are fond of building and repairing highways, so they've been patching over the shaky TxDOT revenue situation for the past decade by approving all sorts of borrowing. Billions of dollars of it.
Millions of 56 mpg vehicles rolling around Texas would make that dance much harder.
You think we've got a lot of toll roads now? Hang on. And squirrel away the money you save on the Obama gas tax cut and unbought gasoline.
You're going to need it.
For questions, tips or story ideas, contact Getting There at 445-3698 or bwear@statesman.com.
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