MERCER: Highway fund deficit is driving nation deeper into debt
PIERRE -- It must be horrible to live in fear, like so many members of Congress, that a tax increase could cost your job.
Nothing else explains the maneuvers so many of our elected 535 are taking, as Congress tries to avoid increasing the federal motor-fuels tax.
The federal trust fund for highway aid has run on fumes for years. It is forecast to be financially broke again in August.
That is the heart of road-construction season across the northern states. States will get I.O.U.s from the federal Department of Transportation.
As the comic said, “What a country!”
Congress last raised the tax in 1993 to 18.4 cents per gallon. Through inflation, the purchasing power decreased approximately 40 percent.
Just to stay even, the federal tax needs to be increased about 7 cents per gallon.
Recent days in Pierre, convenience stores ranged by about 20 cents per gallon in advertised prices. That’s for what’s become the current standard: Regular gas that contains approximately 10 percent ethanol and carries an octane rating of 85 and sometimes 87.
South Dakota imposes its own motor-fuels tax, too. It is 22 cents per gallon for regular gasoline and diesel, and less for blends that mix in ethanol or other bio-fuels.
Members of our Legislature are conducting hearings and holding meetings across South Dakota this summer to talk about the need for more highway funding.
In the next few days the state Transportation Commission begins its annual set of meetings to meet with the public about the proposed highway construction plan for 2015.
The ideas floating from Washington, D.C., don’t call for straight-up increases in the federal tax.
There’s one gimmick to encourage U.S. corporations to move more business back from overseas so that more federal corporate taxes can be collected now -- and less in the future.
There’s another gimmick to encourage U.S. corporations to reduce their pension set-asides now, so that they have more earnings to tax now -- and less in the future.
There are more ideas that fit the same category of putting off the hard decision.
But there are many hard decisions coming, because our nation wants less gasoline and diesel consumption, and electric vehicles are gaining popularity.
Less carbon-based fuel that is consumed, equals less carbon-driven taxes collected through the federal and state taxes.
More electric vehicles accelerate that trend.
There was a long period in our nation when federal taxes on motor fuels were set aside at the federal level for highway aid. That’s still how we do it in South Dakota with our state tax.
But Congress crossed the line in the past decade when it began tapping general revenue to supplement demands for more money in the highway program. That meant a portion of federal highway aid, that wasn’t be covered by federal fuel tax and other traditional highway-related sources, began driving up the national debt.
We started building and repairing our highways and bridges using I.O.U.s for some of the work. States still received aid to pay contractors, but the national debt was growing in Washington, D.C.
And now many in Congress want to make the hole deeper, because they fear the voters.