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Panel Proposes Federal Gas Tax Hike

WASHINGTON -- A 15-member panel created by Congress is urging lawmakers to increase the federal gasoline and diesel fuel taxes by 50 percent to finance highway construction and repairs, until the government devises another way for motorists to pay for using public roads, the Associated Press reported.

In a report scheduled for late January, the National Commission on Surface Transportation Infrastructure Financing is expected to recommend raising the gas tax by 10 cents a gallon and the diesel fuel tax by 12 to 15 cents a gallon. It will also advise that fuel tax rates be tied to inflation. The commission will also recommend states raise fuel taxes and make greater use of toll roads and fees for rush-hour driving.

As motorists drive less and buy less fuel, the current tax rates of 18.4 cents per gallon for gas and 24.4 cents a gallon for diesel do not raise enough money to keep pace with the cost of road, bridge and transit programs, the AP reported. The annual gap between revenues and investments needed to improve systems was roughly $105 billion in 2007, and will increase to $134 billion in 2017 under current trends, according to a study by the Transportation Research Board of the National Academies.

However, President-elect Barack Obama has expressed concern about raising gas taxes in the current economy. In addition, highway and transit programs are dependent on revenue raised by fuel taxes that are not sustainable, as Americans are driving less and switching to more fuel-efficient cars and trucks, the report stated.

Commission members argued the government must find funds somewhere.

"I'm not excited about a gas tax increase, but the reality is our current gas tax doesn't pay for upkeep of the system we have now," Adrian Moore, vice president of the Reason Foundation, a libertarian think tank and a member of the highway revenue commission, told the AP. "We can either let the roads go to hell or we can pay more."

A draft of the commission’s recommendations called for creating a new system where motorists are taxed according to how much they use roads.

"Most if not all of the commissioners have a strong belief and commitment that we need a fundamental transformation of the current system," said commission chairman Robert Atkinson, president of the Information Technology and Innovation Foundation, a technology policy think tank in Washington.

Charles Whittington, chairman of the American Trucking Associations (ATA), told the AP Congress may decide to disguise a fuel tax hike as a surcharge to combat climate change. The ATA supports a fuel tax increase as long as the money goes to highway projects, according to the report.

In other gas tax news, as of Jan. 1, Georgia cut the sales tax it charges gas dealers by almost four cents per gallon, Atlanta area television station 11Alive News reported.

A spokesman for the Georgia Department of Revenue told the station the state hopes competition will force retailers to cut prices. The tax rate will be adjusted every six months.

And at the State Capitol, Democrats have said they want to end the floating portion of the sales tax and replace it with a single per-gallon tax instead.

"Prices are going to go up," Atlanta Senator Vincent Fort told the station. "We're going to be held hostage to this floating tax. I think it's probably a good idea to consider doing a flat excise tax."

Meanwhile, Nebraska’s gas tax increased by less than a half-cent per gallon Jan. 1, resulting in an extra six to eight cents of tax collected on an average fill up, the Wauneta Breeze reported.

The 0.4 cent increase, which brings the state gas tax to 26.4 cents per gallon, was instituted by the State Department of Roads, based on consultation with the State Department of Revenue, the report stated. The increased tax rate is expected to raise about $2 million in additional revenue.
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