NSSGA warns cutting gasoline user fee will devastate highway and public transit funding

News NSSGA September 09, 2005
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The National Stone, Sand and Gravel Association voiced concern over efforts by states and members of Congress repeal or suspend the gasoline user fee, which will negatively impact funding for highways and public transit systems, according to NSSGA President and CEO Joy Wilson in a recent statement. NSSGA believes cutting the user fee will have an adverse effect on our nation’s transportation systems and will not result in direct savings to consumers as intended, Wilson said.

“In a time when our nation is dealing with the worst natural disaster in modern history, unobstructed access to and within our nation’s cities is critical. Funding for both highway and public transit systems should be a top priority of our government, on the state and national levels, or the whole country begins to crumble—education, commerce, defense, environment, energy, services…everything,” said Wilson.

The current supply disruption of gasoline is already having an adverse effect on transportation funding. As an example, due to the high gas prices, consumption is down in Virginia, Maryland and the District of Columbia, where for June and July all three governments saw gas tax receipts drop by nearly $1 million each in comparison to the same months in 2004.

Wilson pointed out that under the law, the 18.4-cents-per-gallon user fee is divided among the Highway Account, Mass Transit Account and for the Leaking Underground Storage Tank Trust Fund for environmental cleanup. Suspending or eliminating the user fee will have a direct impact on all facets of the nation’s transportation systems, while providing no guarantee that consumers will pay less at the pump.

According to the Federal Highway Administration, the average person consumes 708.9 gallons of gas per year. Suspending the gas user fee for six months would result in only a $65.22 savings for the average driver over that period. Because the gasoline user fee is a set amount per gallon, not a percentage on the dollar like state and local sales taxes, any reduction would be small and subject to being offset by a subsequent price increase. There is no guarantee that any reduction in the gasoline user fee will have any direct impact on the price consumers pay per gallon.

Wilson recounted that attempts to repeal the user fee on gasoline in 2000 failed three times because the majority of Congress understood that repealing or suspending the user fee would jeopardize essential highway improvements without assuring lower gas prices to consumers.

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