U.S. Gas Tax Hysteria: Old Formula for State Tax Hikes
Although Senate Democrats held off a federal gas tax cut this week, the issue has not gone away (the Wall Street Journal noted Wednesday, however, that individual Senators were feeling less pressure from constituents favoring repeal than expected). If the tax is cut and transportation spending goes back on Congress' chopping block, it will not mean tax freedom for citizens, it will just mean worse revenue problems for states and cities. Revenue problems facing transit agencies trying to invest in the transportation and economic futures of communities in the tri-state region are discussed here every week. CT legislators have been unable to agree on the transportation cuts a gas tax cut would have entailed (see box below). Needs seem equally pressing elsewhere. The Republican administration of Pennsylvania is considering a gas tax hike to finance needed road repairs. In Colorado, the Denver Post reported last month that a panel including both business and environmental leaders appointed by Governor Romer said the state would need $13 billion over the next two decades to meet basic transportation needs (mostly infrastructure upkeep). Higher fuel taxes and car registration fees, and local sales tax hikes to fund specific projects, are all on the table. At the same time it sets new lows in political pandering, Washington is also passing the buck.
