Federal gasoline tax will expire next month

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It hasn’t made the headlines, yet, probably because everyone in Washington (President Obama and all members of Congress) has left on vacation. So, we can expect the multibillion-dollar federal gas tax to be another battleground when they all return after Labor Day.

The 18.4-cents-per-gallon gas tax paid at the pump is set to expire on Sept. 30. At least until now, Democrats and Republicans haven’t been able to agree on renewing the tax that funds the maintenance of highways, mass transit and, to our particular interest, contributes to the Sport Fish Restoration and Boating Safety Trust Fund.

It’s expected that conservative Republicans will use renewal of the gas tax to fire up debate in their quest to shrink the size and scope of the federal government. For example, Sen. Tom Coburn, R-Okla., says: “Instead of burdening states and micromanaging local transportation decisions from Washington, states like Oklahoma should be free to choose how their transportation dollars are spent.”

Coburn and some fellow conservatives in the Senate reportedly want to let states opt out of the federal highway program and give them more control over how the tax revenue is spent on transportation projects. Coburn intends to offer up such legislation as an amendment to any gas tax extension bill, if and when such is considered in the Senate.

It’s notable that Coburn doesn’t indicate opposition to the gas tax per se. However, any battle in Congress these days always raises the specter of a prolonged clash and the possibility of changes in the distribution of the gas tax money. Right now, the Sport Fish Restoration and Boating Safety Trust Fund receives more than $220 million annually in gas tax money, which represents the purchases of off-highway gas by the nation’s boaters. The funds are channeled into valuable boating access, boater-safety and fishing programs.

It gets even more complicated, of course. According to Reuters, some sort of temporary extension of the tax at the last minute seems probable. But, that would mean uncertainty for an indefinite time. Moreover, while the renewed gas tax is projected to raise $245 billion over the next six years, since the economic crash of 2008 the public is driving less and own cars that use less gas. The result is revenues are no longer keeping up with construction costs for the first time in history.

Add to that, the President, when he gets back from vacation and announces his new program to stimulate the economy, is expected to call for more “investment in infrastructure” to create jobs. Members of Congress like Sen. John Kerry, D-Mass., and Rep. Peter DeFazio, D-Ore,, long-time proponents of increased infrastructure spending, are expected to “carry the mail” on Capitol Hill. But, where is the money going to come from?

So, an ominous stage appears to be set on which increased pressure to reduce the gas tax portion allocated to the trust fund could play out. After all, prior to 1984, when the boating industry was successful in getting Congress to allocate the boater’s gas taxes to the fund, the entire boater’s tax went to highways and mass transit. It’s certainly possible an attempt could be made to return to pre-’84 in the name of “economic stimulus.” We should be ready to be engaged if it’s proposed.