Gas tax suspension would erode infrastructure funding, road builders say

Dive Brief:

In an effort to mitigate the effects of high gasoline prices across the country, six Democratic governors requested a pause on the 18.4-cents-per-gallon federal gas tax through the rest of 2022.
However, the American Road & Transportation Builders Association said the measure could unravel the revenue structure and transportation funding in the Infrastructure Investment and Jobs Act.
That's because the bill would authorize the Treasury Department to use general fund dollars to replace the temporarily lost revenue from the halted gas tax. Since the Highway Trust Fund is flush with an additional $118 billion from the Infrastructure Investment and Jobs Act (IIJA), its supporters say the Federal Highway Administration can afford it.

Dive Insight:

The governors who signed a letter of support on Feb. 6 for passage of the Gas Price Relief Act include:

Tony Evers of Wisconsin.
Gretchen Whitmer of Michigan.
Tim Walz of Minnesota.
Jared Polis of Colorado.
Michelle Lujan Grisham of New Mexico.
Tom Wolf of Pennsylvania.

House Democrats introduced a companion measure on Feb. 18.

"The Trust Fund's capacity to finance the construction and maintenance of roads, bridges and highways across the country would not be diminished by the legislation," the letter said. "For these reasons and more, we know it is possible to invest in infrastructure and also provide meaningful relief to consumers at the pump."

Gas prices are more than $1 per gallon higher than they were this time last year, according to AAA data, due to ongoing pandemic lags and in recent weeks, Russia's war on Ukraine. Adding to the pain: Wages are not keeping pace with inflation.

Despite the soaring prices, ARTBA opposes the pause on the grounds that it would diminish the capacity of the landmark infrastructure act. In a letter to Senate leaders, ARTBA President David Bauer called the legislation "shortsighted and misguided."

While there hasn't been any movement on the act since it was launched, a few states have dealt with the issue with their own legislation aimed at alleviating the pain at the pump. On Friday, Maryland paused its 36.1-cent-per-gallon gas tax and 36.85-cent-per-gallon tax for diesel for 30 days, and Georgia suspended its 29.1-cent-per-gallon tax on gasoline and the 32.6-cent-per-gallon tax on diesel fuel through the end of May, according to CNN.

In addition, Florida will suspend its gas tax in October, a low month for tourism, while California is considering a $400 gas rebate and other states are mulling similar measures