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By Catholic Online (NEWS CONSORTIUM)

3/14/2013 (2 years ago)

Catholic Online (www.catholic.org)

Lack of infrastructure to build and maintain roads forces legislators to take unpopular move

After decades of underinvestment in roads, bridges and public transport, many U.S. states face heavy infrastructure costs coupled with a lack of funds. In their desperation, many state legislators are being forced to do something no one likes to see, or do - raise gasoline taxes.

According to the American Society of Civil Engineers, the U.S. will face an $846 billion shortfall in funding for road and surface upkeep by 2020.

According to the American Society of Civil Engineers, the U.S. will face an $846 billion shortfall in funding for road and surface upkeep by 2020.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

3/14/2013 (2 years ago)

Published in Business & Economics

Keywords: Gasoline taxes, infrastructure, road maintenance, Maryland, Iowa


LOS ANGELES, CA (Catholic online) - State budgets stretched to the maximum and jammed roadways have prompted some states to raise gasoline taxes. Wyoming was the first to make the leap this year, raising its tax to 24 cents per gallon from 14 cents on February 15, the first such increase in 15 years.

Governors in Michigan, Pennsylvania, Maryland and Vermont have all proposed raising fuel taxes. The New Hampshire legislature will hold a hearing on Thursday on a bill that would phase in a 15-cent-per-gallon increase.

With prices at the pump already high and the economy foundering, pundits say this isn't the right time to hit working Americans at the gas station. Proponents insist that such taxes are needed to keep a car-dependent economy rolling smoothly.

According to the American Society of Civil Engineers, the U.S. will face an $846 billion shortfall in funding for road and surface upkeep by 2020.

"It's understandable that drivers don't want to see gas prices go any higher, but they also don't want to see congestion and road conditions get any worse," Carl Davis, an expert on state taxation at the Institute on Taxation and Economic Policy says.

More fuel-efficient cars have cut the number of gallons purchased, with the average gas bill dropping. States have tried other ways to raise money without raising gas taxes. New Hampshire's highway fund in 2009 sold a 1.6-mile stretch of a major freeway to the state's turnpike fund, shifting $120 million into the road maintenance budget.

Wyoming was relatively "high on the hog" with mining money and used its general fund to pay for road upkeep. Once the recession shrank that fund however, maintenance money became scarce. Truckers, farmers and other businesses in the Republican-dominated state lent support to this year's gas tax increase.

Recognizing the state's $109-million annual roadway maintenance shortfall and that Wyoming's gas tax was lower than neighboring states', generally anti-tax groups like the Wyoming Taxpayers Association also got behind the 10-cent increase. It is set to take effect in July and raise $47.4 million for highway work.

The Maryland governor Martin O'Malley and fellow Democratic legislators have a plan that would raise prices at the pump by taxing wholesale fuel sales and indexing the gas tax to inflation.

Although the gas tax has not increased in Maryland since 1992, generating public support for the plan will be a challenge. Republicans plan to oppose it, Maryland Republican Party Executive Director David Ferguson says.

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