Home Green Consumer Lower Fed Gas Tax Impacting Mass Transit

Lower Fed Gas Tax Impacting Mass Transit


The federal gasoline tax funds highways and mass transit.  At a current tax rate of 18.4 percent it is one of the lowest gas taxes in the world.  The tax was created in 1956 to finance highway construction, and in 1982, Congress expanded its scope to fund mass transit as well.  Since 2007 the receipts collected from the federal gasoline tax have been down by a seventh.  According to the Economist, the reason for the decline is that Americans are driving less, and that more fuel-efficient cars are lowering tax income as well.  The current recession definitely has played a role in keeping Americans off the roads, but an increase in hybrid vehicles is also playing a significant role as well.  More and more automobile manufacturers are increasing the number of hybrid models on the road, all in an effort to boost fuel efficiency due to rising gas costs.  Unfortunately, the reduction in tax receipts is hitting mass transit hard.  Seventeen percent of funding for all mass transit originates from the federal gasoline tax.  The declines are making it difficult for mass transit to make their budgets and to invest in new infrastructure.  Perhaps now is the time to both raise the gasoline tax and divert more of the funding to mass transit, or take a higher percentage of current receipts and apply them to new mass transit infrastructure projects.  New projects would create new jobs, and we need to invest in mass transit to reduce our dependency on the automobile.

Photo Credit: John Vlahakis


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