NSSGA Washington Watch
September 1, 2005 Volume 5, Issue 31 

An Industry Update on the White House, Congress and Federal Agencies
Pamela J. Whitted, Vice President, Government Affairs
Jim Riley, Director, Government Affairs
John Boling, Director, Government Affairs
Joe Colaneri, Director, Government Affairs
Patricia Maeder, Division Coordinator


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 In This Edition...

HOUSE TO RETURN TO WASHINGTON TOMORROW

House Speaker Dennis Hastert (R-Ill.), in consultation with Minority Leader Nancy Pelosi (D-Calif.), announced this afternoon that pursuant to the emergency recall authority provided in the Adjournment Resolution passed by the House in July, he is calling the House back into session tomorrow. The action comes after a conference call President Bush held with the bicameral leadership today informing them that FEMA needs additional funds this week.

Details of the funding bill are not yet available, but the goal is for the House to consider the legislation tomorrow. Currently, it is expected the bill will pass without a recorded vote; therefore, members will not be required to return to the Capitol.

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CALLS FOR GAS USER FEE SUSPENSION AND/OR REPEAL MOUNT

We have heard and read reports from several states, including Oklahoma, Illinois, Wisconsin and Missouri, calling on the governors to temporarily suspend or repeal the state gas user fees in response to the increasing gas prices that have been exacerbated by the disruption in oil supply and distribution caused by Hurricane Katrina. We urge members to tell lawmakers to resist repealing or suspending transportation user fees.

NSSGA anticipates that there will be calls for repeal of the federal gasoline user fee when Congress returns to Washington. Already hearings have been scheduled on the increase in gas prices.

NSSGA is on record in opposition to repeal of the gasoline user fee. Increases in gasoline prices do not result in increases in the gas user fee, which is set at 18.4 cents a gallon. To repeal the user fee on gasoline is counterproductive and would delay needed road and highway repairs that are particularly important at this critical time of national tragedy when so many cargo routes have been destroyed or are temporarily unusable.

For your use and information, NSSGA's policy position paper on repeal of the federal gasoline user fee follows. If we can provide further help, please contact NSSGA's Government Affairs division.

FEDERAL GASOLINE EXCISE TAX REPEAL

NSSGA POSITION: NSSGA strongly opposes repeal or suspension of the federal gasoline excise tax. The user fee, paid by those who utilize the roads, is dedicated to the Highway Trust Fund (HTF) and is essential to fund the building and maintenance of our nation's transportation infrastructure which supports millions of jobs nationwide. To repeal or suspend the gas tax would imperil our economic growth, not aid it, and threaten homeland security interests that rely upon a strong and effective transportation system to move people, goods and supplies in times of emergency. In addition, it would sharply curtail necessary repairs and capacity enhancement to our nation's highways targeted to help reduce the traffic congestion that is choking America's cities, costs consumers money, wastes fuel, and places travelers' lives at risk.

BACKGROUND: In response to rising gas and diesel prices, a number of bills were introduced in the 108th Congress to suspend or repeal all or a portion of the federal motor fuels tax. Sponsors and supporters argued that such action would help moderate the rise in gasoline prices that was occurring. Attempts to repeal the user fee on gasoline in 2000 failed three times because the majority of senators understood that repealing or suspending the user fee would jeopardize essential highway improvements without assuring lower gas prices to consumers. Since the gas user fee is a set amount per gallon, not a percentage on the dollar like state and local sales taxes, any reduction would be small and subject to being offset by a subsequent price increase. It is anticipated that renewed attempts to repeal or suspend the gas user fee will be made during the 109th Congress as a result of sharp spikes in oil prices caused by increased demand and natural disasters that have led to record gas prices.

TALKING POINTS:

  • NSSGA strongly opposes repeal or suspension of the federal gasoline excise tax.
  • Construction and maintenance of highways is crucial to the U.S. economy. According to the most recent data, transportation spending accounts for 10.5 percent of the U.S. gross domestic product. (Source: U.S. Department of Transportation, Bureau of Transportation Statistics, 2003.)
  • The Federal Highway Administration estimates that at least $50 billion a year is needed just to maintain our current highway system and stop the spread of traffic congestion. Our nation must invest far more if we choose to eliminate the congestion that exists today. It is counterintuitive to eliminate or suspend the source of funds that impacts the quality and security of every American life.
  • If the federal motor fuel user fee were to be suspended for six months, the Transportation Information Program estimates that lost transportation revenues would be $17.5 billion, resulting in the loss of $100 billion in transportation benefits to consumers and the loss of 740,000 jobs nationwide.
  • Federal surface transportation law ties federal highway investment in state transportation programs dollar for dollar to incoming revenues to the Highway Trust Fund's Highway Account.
  • Twenty percent of the revenues from the Highway Trust Fund go to mass transit, subsidizing the cost of bus, subway and rail travel that would otherwise be more expensive for those who can least afford it. Repeal or suspension of the gas user fee would sap funding from these alternative transportation methods as well, not just highway projects. There is no guarantee that any reduction of the gas user fee would be passed along to consumers.
  • The gas user fee, which has not increased since 1993, is the source of 43 percent of all highway capital improvement funding. (Source: ARTBA analysis, 2001)
  • The increased price of gasoline is generally understood to result from a shortage of refining capacity or refineries off-line due to natural disasters, changeover to cleaner fuels mandated by the 1990 Clean Air Act
  • Amendments, and distribution limitations plus increased demand in China and India. Cutting the gas user fee will not increase supply, the primary arbiter of price, since according to the Energy Information Agency refineries are operating at full capacity.
  • Cutting the gasoline user fee will result in congestion causing increased pollution that costs money, wastes fuel, and impedes highway safety improvements that save lives.
  • Each year 14,000 lives are lost due to unsafe road and bridge conditions. In its 2005 report card on America's Infrastructure, the American Society of Civil Engineers graded American roads with a "D", down from a D+ of its 2003 report card, and our bridges with a "C".
  • According to the Texas Transportation Institute, congestion costs American motorists $63 billion annually in wasted time and fuel costs. It's time to speak up for the motorists and the consumers who need the goods and get these roads maintained and improved for today's and tomorrow's population.
  • The Road Information Program (TRIP) in 2005 reports that failure to make needed repairs to our nation's roads costs, motorists an additional $52 billion a year - or $271 per motorist - in extra vehicle operating costs. Those additional costs include the cost of extra fuel to drive on roads that need repairs.

    • Updated: September 2005

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