Fossil Resource Expansion Supports Higher Taxes on Fuels

If gasoline taxes were raised high enough, as this article states, to cover highway expenses, the political fall out would be significant.   But if expansion of the supply of gasoline, drilling for oil on federal lands and building the XL pipe line, would surly make the price of gas go in the direction needed to support higher taxes.

Why is it that fossil discovery on federal lands is out of the question? Why stop the XL pipe line? Why stand in the way of 'fracking' that will deliver new resources for our prosperity? Why give billions of tax dollars to companies for green energy that were failing before the monies were ever sent? 

A lot of question but few answers. But not to worry, the majority of the population really don't want to hear how this will all work out in the end - they voted last November for more bad news; a failing economy, more scarcity and dependence. Who knew?

Gasoline Taxes and Tolls Pay for Only a Third of State & Local Road Spending

Source: Joseph Henchman, "Gasoline Taxes and Tolls Pay for Only a Third of State & Local Road Spending," Tax Foundation, January 17, 2013.

January 18, 2013

A key issue for many state legislatures this year is transportation funding, says Joseph Henchman of the Tax Foundation.

The lion's share of transportation funding should come from user taxes and fees, such as tolls, gasoline taxes and other user-related charges. When road funding comes from a mix of tolls and gas taxes, the people that use the roads benefit from them and should bear a sizeable portion of the cost. By contrast, funding transportation out of general revenue makes roads "free," and consequently, overused or congested -- often the precise problem transportation spending programs are meant to solve.

• Nationwide in 2010, state and local governments raised $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, but spent $155 billion on highways.
• In other words, highway user taxes and fees made up just 32 percent of state and local expenses on roads.
• The rest was financed out of general revenues, including federal aid.

The ratios do not change much when adding in all transportation modes.

• In 2010, state and local governments spent $60 billion on mass transit, $23 billion on air transportation facilities, $1.6 billion on parking facilities, and $5.3 billion in ports and water transportation, in turn raising $13 billion in mass transit fares, $18 billion in air transportation fees, $3.2 billion in parking fees and fines, and $3.8 billion in water transportation taxes and fees.
• Altogether, states raised about 36 percent of their transportation spending from user taxes, fees and other charges.

Expanding tolls and indexing gasoline taxes for inflation may not be politically popular, even though transportation facilities and services are highly popular. Given that transportation spending exists, states should aim to fund as much of it as possible from user-related taxes and fees. Subsidizing highway spending from general revenues creates pressure to increase income or sales taxes, which can be unfair to non-users and undermine economic growth for the state as a whole.