Search This Blog


Useful report doesn't make gas tax hike case

A Louisiana Legislative Auditor document provides more impetus for raising the state’s gas tax. It also takes the wind out of those sails through other information it provides.

This report audited the condition of the Transportation Trust Fund, the main source for money to pay for roads. It concludes that presently the TTF won’t match identified needs, computed at just under $15 billion three years ago. It identified as sources a sticky state gas tax, the regular of 16 cents and the special TIMED assessment for discrete projects of 4 cents, not raised in over 30 years and not indexed; increasing fuel efficiency in internal combustion engine vehicles but also a move to alternative energy sources for transportation principally electric vehicles; and siphoning off money for TIMED as the 4 cents doesn’t cover everything.

It does note that a new tax starting this fiscal year, somewhat insufficiently, will offset a portion of fuel taxes not collected because of replacement by electric vehicles on roads. It will slightly exceed loss to EV use but still leave the gap of increasing fuel efficiency, to the tune of $323 million over the next decade. However, the TIMED gap already has cost almost $310 million and is forecast to eat up another $900 million or so until its expected completion in the mid-2040s.

Yet the audit also points out how the state fiscal structure regarding transportation funding is skewed towards the state accommodating what should be local or private items. Indeed, were the state to change these policies that allow spending current gas tax monies wastefully on projects that local governments should be doing, on private interests, or on unnecessary things, that could save at least $100 million a year for redirection for roads building and maintenance. Worse, as the report notes, from time to time over the past few years the state has given to local governments TTF resources beyond legal requirements

If excising this favoritism, both the deterioration of revenues due to more efficient gasoline use and TIMED – which was sold over 30 years ago as a self-contained effort that would be finished entirely by now and within the 4 cents boundary – sucking money away from the TTF could be more than compensated for with TIMED averaging a draw of $45 million (it actually fluctuates from lower to higher as time passes until the last couple of years where it doesn’t draw) and the efficiency gap amounting to just over $32 million a year.

So, there’s no need to raise gasoline taxes for the TTF to have sufficient balances to meet matching fund needs, if not make progress on the backlog (which will decline by at least a billion bucks alone because of the debt-fueled spending bills Washington under control of Democrats has sprayed onto the country over the past couple of years). The report has some other suggestions, culled from other states, that resort to raising taxes one way or the other, but none of these need to be followed.

Perhaps one suggestion not listed would be to enact a tax on batteries installed in electric vehicles. Since these last roughly in proportion to use – the more the care is driven, the quicker they wear out – an excise tax on each sold would capture more accurately the use the driver demands of Louisiana roads and pump in some more money to the TTF.

The state has plenty of resources to address transportation needs, but misallocation that serves to subsidize excessively non-state interests interferes with this. Correcting that, rather than putting the bite on citizens, best serves the people’s interests.

No comments: