In Washington Tuesday, a special commission appointed to study the need to repair the nation\u2019s aging bridges and roads said the answer is to more than triple federal gasoline tax — increasing it by 40 cents per gallon over the next five years.<\/p>\n
The two-year study by the National Surface Transportation Policy and Revenue Study Commission is the first to propose broad changes since a devastating highway bridge collapse in Minneapolis last August.<\/p>\n
But in a 10-page dissent, the commission\u2019s chairwoman, Transportation Secretary Mary Peters, and two other members sharply criticized the gas-tax-hike proposal.<\/p>\n
She and the two commissioners call instead for sole reliance on tolls and private investment, which Secretary Peters said would avoid sending millions of dollars of new tax revenue to Washington to end up as congressional pork.<\/p>\n
\u201cRelying on increases in the federal fuel tax and inviting political earmarking is a recipe for failure that we, as a nation, can no longer afford,\u201d she and the two commissioners wrote.<\/p>\n
Well, the big oil companies can afford to pay a lousy additional 40 cents per gallon out of their profits, can\u2019t they?<\/p>\n
Actually, no.<\/p>\n
The California state Energy Commission — hardly an outfit anxious to sing the praises of the oil companies — estimates that out of a current $3.33 per-gallon price of branded gasoline, the crude oil cost is $2.22. (If you want to lower that, tell your politicians to approve offshore drilling and the construction of more domestic refineries.) Of the remaining $1.11 that we pay at the pump, state, local, and federal taxes and fees eat up 62 cents — more than half. That leaves 38 cents for \u201crefinery costs and profits,\u201d and one thin dime for \u201cdistribution costs, marketing costs, and profits,\u201d the California government reports.<\/p>\n But that \u201clumping\u201d of costs and profits still makes profits sound bigger than they are. Last year, Mark J. Perry, professor of economics at the University of Michigan, agreed that taxes added up to 62 cents on the average gallon of gasoline — while company profits amounted to 10 cents per gallon. (http:\/\/mjperry.blogspot.com\/2007\/05\/gasoline-taxes.html<\/a>)<\/p>\n In other words, if \u201cBig Oil\u201d cut their profits by 50 percent — never mind that investors would be far less likely to give them the capital they need to build refineries, explore for new deposits, drill new wells, etc. — gasoline might drop from $3.20 per gallon to $3.15. Yee-hah! Steak dinners all around!<\/p>\n On the other hand, if greedy politicians were to trim their current gasoline taxes in half, gasoline would drop overnight from $3.20 to $2.89.<\/p>\n What\u2019s that? All those gasoline taxes go directly into highway construction and repair?<\/p>\n Not really.<\/p>\n Although the Federal-Aid Highway Act of 1956 established the Highway Trust Fund and stipulated that 100 percent of federal gas tax revenues be deposited into the fund, that\u2019s no longer the case.<\/p>\n \u201cHighway Trust Fund revenues were first allocated to mass transit in the Surface Transportation Act of 1982, when Congress raised the gas tax from four cents per gallon to nine cents per gallon and dedicated one cent, or 20 percent, of the increase to the newly-established Mass Transit Account,\u201d reports the American Road & Transportation Builders Association. \u201cEach time there has been an increase in the amount of gas tax going into the Highway Trust Fund — 1990, 1993 and 1997 — 20 percent of the increase has been allocated to the Transit Account and 80 percent to the Highway Account. Of the current (federal) gasoline tax of 18.3 cents per gallon, 2.86 cents per gallon is allocated to the Mass Transit Account.\u201d<\/p>\n That\u2019s like charging you a six-cent tax every time you buy a Coca-Cola, and sending one of the pennies to Pepsi.<\/p>\n Indeed, buried in Tuesday\u2019s 68-page report from the NSTPRSC was an admission that some of the added 40 cents they want to slap onto the price of each gallon of gasoline would go to \u201cpublic transit\u201d — not to mention another $2 billion over the next decade siphoned off to \u201cdevelop new energy sources.\u201d (Colorado oil shale, anyone?)<\/p>\n If our highway infrastructure is in such urgent need of repair, why continue diverting funds to ethanol boondoggles that drive up animal feed costs while generating no more energy than they cost, and then tossing another 15 percent of your scarce funds at \u201cpolitically correct\u201d mass transit boondoggles that coast around our urban areas half empty?<\/p>\n
\n(http:\/\/www.energy.ca.gov\/gasoline\/margins\/<\/a>)<\/p>\n