Opinion: The proposed gas tax holiday is not the vacation we are hoping for


As the impacts of the Ukraine crisis are now being felt at home, some federal (and state) lawmakers are proposing a roll back or temporary halt on the gas tax. While this idea may sound good in theory and likely sees support in public opinion polls as well, it will not provide relief at the pump and diverts the attention away from the fact that bad energy policy put the United States in this situation in the first place , not a war or a motor fuel tax increase.

Patrick De Haan, the head of fuel cost analysis for fuel-price tracking service GasBuddy, commented last month that these gas tax rollback proposals are likely to have a “negligible” effect on prices and “It will take some time for motorists to see any impact.”

These “holiday” proposals will do more harm than good as they will require taxpayers to pay more income and property taxes to make up for the lost revenues of the user fee style gas tax. According to a 2021 analysis by the Peter G. Peterson Foundation, the Federal Highway Trust, funded primarily through the gas tax, is projected to face a cumulative shortfall of $207 billion by 2031. Halting the gas tax will only make things worse.

Here in New Jersey, we understand this all too well. When the gas tax was raised in 2016, it was because the Transportation Trust Fund’s (NJTTF) debt exceeded its revenue due to years of poor policy decisions. Because of this, more than $1 billion a year of the Transportation Trust Fund goes toward paying the debt service – something that would otherwise come from property taxes.

In fact, since 1984, the NJTTF Authority has borrowed over $22 billion to fund transportation needs. As of the end of 2020 the NJTTF Authority had $14.8 billion in outstanding bonds which resulted in the use of $1.34 billion of tax fund revenues to pay principal and interest on these bonds. This allocation to debt service cost represents over 60% of 2020 gas tax revenues. Poor policy decisions mean residents pay more and get less. This is like funding our roads and bridges with a credit card.

This is to say nothing of the jobs and economic impact. The White House Council of Economic Advisors has repeatedly stated that $1 billion in Federal highway and transit investments supports more than 13,000 jobs for one year. Additionally, a 2020 report from the American Public Transportation Association found investment in transportation can yield 49,700 jobs per $1 billion invested and offers a 5-to-1 economic return. Cutting off the federal funding source for those investments is just plain irresponsible.

Having said all that, how do we combat the price impacts consumers are facing? With better energy policy and a recognition that we need an all-of-the-above energy strategy, not one that picks (often expensive) winners and (often affordable) losers. Alaska’s North Slope—the National Petroleum Reserve in Alaska, or NPR-A—is an oil-rich site roughly the size of the state of Indiana that is sitting there ready and waiting to provide domestically produced relief. This location was set aside in 1923 by President Warren G. Harding for oil production in case of emergency. Or take a trip to Arizona where the largest vehicles that would normally produce more emissions, like garbage trucks, are run on alternative fuels like liquid natural gas – something we have an abundance of here in the United States.

Our ability to blunt this ‘energy crisis’ swiftly and with relative ease if we are willing to take a look at our policies first. We ask our elected officials to think before they act.

Mark Longo is the Director of the Engineers Labor-Employer Cooperative, the Labor Management fund for the International Union of Operating Engineers, Local 825. He has more than 25 years of transportation policy experience and currently holds a seat on the New Jersey Infrastructure Bank.

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