From Marc Korman The simple answer to why gas tax increases have been proposed is that we need a massive investment to maintain our current infrastructure and build new projects. Close to home, many of us want to see some type of Purple Line and Corridor Cities Transitway built, as well as an increase in funding for Metro maintenance to minimize crippling delays. Regular old roads also need continuous investment. There was an unfortunate reminder of the needs when the 35W bridge in To understand the issue, some context and facts are needed. Historically, transportation projects have been funded through the gas tax, starting way back in 1919 when At the federal level, the gas tax has been 18.4 cents a gallon since 1993, with 15.44 cents per gallon going towards the Highway Trust Fund and 2.86 cents per gallon going into the Mass Transit Account. In The idea that we need a massive investment in infrastructure has been put forth at all levels of government. Nationally, one study by the Urban Land Institute and Ernst & Young forecast a $1.6 trillion infrastructure investment deficit between now and 2010, though this goes beyond surface transportation and includes needs for sea and air ports. The state Secretary of Transportation, Keep Maryland Moving, and regional business groups are all advocating for an investment of $600 million in Maryland’s Transportation Trust Fund to meet our state needs (up from $421 million expected to be budgeted in FY08). Here in Another reason cited in support of a gas tax increase is that it will reduce consumption. This may or may not be true, as many people consider gasoline a relatively inelastic good, meaning demand does not fluctuate much as prices increase. Of course, there must be a limit of how high prices can go before having an effect. When gas prices rise there is also increased interest in alternative energy, which is beneficial to the environment. In the next blog entry, we will look at the proposals that have been made.
It seems that at all levels of government, there has been some type of push for an increase in the gas tax. Given the serious potential for a recession and gas prices already around all time highs, this may be surprising. Why is there such a push for an increase in the gas tax and do we need it? In this three part blog series I will attempt to shed some light on this issue.
The first blog entry will set the stage by providing some general background information. The second blog entry will discuss the various proposals that have been made. The third and final blog entry will consider the alternative proposals.have been diverted from transportation. In the early ‘90s, the federal government used the gas tax for deficit reduction. Here in
Monday, January 28, 2008
Do We Need A Gas Tax Increase? Part I
Posted by David Lublin at 9:57 AM
Labels: Marc Korman, taxes