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Will There Be a Gas Tax Hike?

As gasoline and diesel prices continue to fall, policy wonks are eyeing a potential increase in the federal gas tax. The low gas prices across the U.S. has given rise to fresh talk in Washington of raising the federal gas tax for the first time in over 20 years, with leading Republicans now saying a hike must not be ruled out. However, it is still unclear whether or not there will be a political opening for such an increase. The highway trust fund (HTF), the main federal conduit for road and transit spending, is again facing a crisis at the end of May when a stopgap extension approved last summer expires. The gasoline and diesel taxes don’t raise sufficient funds (user fees) to meet current funding obligations. The Congressional Budget Office (CBO) also projects that gasoline tax revenue, the main source of funding for the HTF, will continue to lag behind spending due to a 20-year freeze in the motor fuels tax rate and to improving fuel economy standards for vehicles. Because of inflation, the 18.4 cent tax on gasoline that was enacted in 1993 is equivalent to only 11.5 cents today. CNG and LNG would probably see an increase in its HTF tax rates if the diesel and gasoline taxes were to increase. NGVAmerica’s Federal Government Affairs Committee (GAC) will be looking at this issue over the next couple of months. Below are three links to articles on the subject.