Wednesday, May 25, 2022

Sid Salter: Gas Nightmares Exacerbated by Stagnant Gas Taxes Impact on Future Maintenance

  American taxpayers, who are also gasoline customers, are in an economic vise on questions of the cost of gasoline and the tax revenue gasoline purchases generate for future high construction and maintenance.

The Associated Press reported in recent days that the average U.S. price of regular-grade gasoline spiked 33 cents over the past two weeks to $4.71 per gallon and based their numbers on the Lundberg Survey, an oil and gas industry analyst.

The report put the average price of unleaded gasoline at the pump as $1.61 higher than it was one year ago. The highest average price for regular-grade gas is reported in the San Francisco Bay Area at $6.20 per gallon. The lowest average price was in Tulsa, Oklahoma, at $3.92 per gallon.

Those prices broke prior records set during the Great Recession in 2008 as reported by the U.S. Energy Information Administration (EIA) at $4.11 per gallon.

Because of Mississippi’s status as a producer in the Gulf Coast energy market and the proximity to Gulf Coast oil refineries, Mississippi gas prices have traditionally trailed the national average price per gallon. That’s still true, but state gas prices averaged $4.185 last week according to the AAA Gas Prices index.

But despite the historic increases in the price of gasoline in the U.S. and Mississippi – and the fact that every aspect of road construction and maintenance costs more now than a year ago – the tax revenue produced at the federal and state levels remains unchanged. No matter the price of gas, the tax revenue is the same.

Congress and the Mississippi Legislature face the same problems in raising highway funds from fuel taxes at current rates. Fuel consumption is flat-to-declining and fuel efficiency continues to improve, so as we drive less and get more miles to the gallon, the federal and state gas taxes don’t raise enough revenue to sustain the current transportation infrastructure or to expand and improve it.

Plus, with gas prices this high, the political appetite for gas tax hikes is less than zero. So, the future of highway maintenance and construction is tenuous at best for the foreseeable future.

The combined 37.19 cents-per-gallon total federal and state gasoline taxes are failing on several fronts — Mississippi’s total 18.79 tax and fees per gallon is a flat tax. So, too, is the 18.4 cents-per-gallon federal gas tax. The only way the state and federal governments take in more revenue in gas taxes is for the volume of gas consumed to increase — and automobiles are now manufactured to require less fuel consumption than a decade ago.

Neither the federal nor state fuel taxes have kept pace with inflation. Politically, the prospects for funding highway construction and maintenance based on the present structure of federal and state gas taxes are extremely dubious. The exponential growth in the popularity of electric cars suggests yet another wrinkle in the funding riddle.

The Congressional Budget Office reported last year that state and federal fuel taxes account for more than 40 percent of all highway construction and maintenance in the country and that if the funding system does not change by 2030, federal transportation funding will be $188 billion over budget. Despite 36 states either raising gas taxes or enacting variable rate fuel taxes, Mississippi has remained constant.

Every state in the South and every state that borders Mississippi has higher gas taxes.

When the current gas price surge cools – and analysts say it eventually will – Mississippi lawmakers will certainly have good reasons to reconsider Mississippi’s fuel taxes. The most popular vehicle in Mississippi, according to Kelly Blue Book data, is the Ford F-150. Production on the new Ford F-150 Lightning electric truck has seen production doubling due to popularity.

Both federal and state lawmakers have decisions to make about fuel taxes as a funding source for future highway construction and maintenance. Those decisions simply must include working electric vehicles into that mix.

And what’s the worth of being one of the five states with the lowest fuel taxes if we can’t maintain our current roads and bridges or build new ones?


Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com

24 comments:

Anonymous said...

In other words ? It will be almost impossible to real in prices. Ever.

Anonymous said...

Just reading the title made me not want to read Sid’s wordy mansplaining…. Lol

Anonymous said...

What a load of garbage from Sid. Please stop paying for this content. Raising taxes NEVER solves problems. Sid is just another tax and spend liberal. Does he even know how gas taxes are allocated? Just word vomit trash.

Anonymous said...

Shut up Sid. This is an entirely fabricated crisis and you know it. Biden accidentally admitted this is all part of the “green transition” while the world leaders are at Davos 2022 warning their subordinates not to falter with Net Zero 2030 in the face of populist demands for cheap “dirty” energy.

There is plenty of oil and gas. They just want free people to suffer and/or die from malnutrition during the long, harsh winters ahead.

Anonymous said...

Anyone else notice how much a good gas can costs? Stainless steel jerry cans are about a hundred bucks. Truth is, gas is still cheaper here than in Europe and Asia and you need to store about a week's worth for your generator. If they are telling us there will be blackouts, bet your ass there will be blackouts. They are shutting down coal plants faster than they are building solar and wind farms. They know what they are doing.

Anonymous said...

"...for future high construction..." What is "high" construction? Highway?

Anonymous said...

8:23 : Which is me......It's REEL in prices .

Krusatyr said...

Texas has toll roads that take a picture of your tag and send periodic bills in the mail.

This wholly automated use tax system works well there, rates and use scheme are fair, highways are nice.

Anonymous said...

Totally a crisis that our politicians have made. Drill for some damn oil. NO ONE believes that the US can’t be energy independent with $2 gas. We were 24 months ago. Liberals are killing our country.

Anonymous said...

@8:38
You sound so poor. Imagine storing gasoline like a pleb. I have a 40kw genset that runs off the natural gas line running to my home. It switches over so fast that my lights don’t even flicker. It can even charge my Teslas!

Anonymous said...

Lets start by putting a Toll on the Spillway Road, $1 each way. Would help with the trash issues and maintenance of ramps, launches, etc.

Anonymous said...

9:19: And our capital city doesn't even have water and parking meters that work.

Anonymous said...

Teh current prices fall squarely on the shoulders of the current administration, from guy who campaigned on green energy and shutting down the oil and gas business. First day in office he executed a series of executive orders that negatively affect the price of gasoline at the pump and none of them or their followers want to believe he is responsible. If ignorance is bliss, the ones who voted for him must be the happiest people on the planet, yet you never see them post about his accomplishments like they touted him before the election. You get what you vote for and elections have consequences. The people that voted for the current administration are getting exactly what they voted for. We should hold every one of them that were so vocal during the election accountable for their actions and call them out on it.

Anonymous said...

@10:36
You should replace most of your that’s with who’s so that your point isn’t totally lost by appearing to be someone who in not only unhinged, by who also has shitty grammar.

Anonymous said...

For those who think we need more gas taxes. Have you ever noticed how many more cars there is on the highways today compared to the old days when gas taxes were invented? Have you ever stopped to think how much more gas is sold today for all of those cars?
We don't need more taxes. We need people who do not take our tax money for their private bank account. Use the money for the reason it was collected and not for your own private use.

Anonymous said...

11:08 using the old grammar police line when you can't think of a valid response. Typical of those who think they are better than others.

Anonymous said...

Sid Salter works in the public education, which is even more detached from reality than government in general.

Anonymous said...

9:34 am
If you aren't going to study the issue well enough to comment, please keep your simple minded notions to yourself .

Anonymous said...

I believe we should be focusing on personal, auto-piloting quad-rotor craft (drones to the ignorant, unwashed masses) and leave the “roads” to the self driving semis and delivery trucks.

Anonymous said...

@ 1:55
Spoken like a true elitist liberal.

Anonymous said...

Salters never lets the truth get in the way of HIS facts.
His solution izzz always more taxes.

Anonymous said...

Road taxes aren’t used to build roads. They go into the general fund. More smoke and mirrors. It’s why roads are @#$&$#

Anonymous said...

All Sid is ever worried about is tax money.

Anonymous said...

Wondering if Paris has a summit on how to have an airport with no restaurant and also with no airport store open after 9 p.m. I guess there's always the water fountain.



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