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No Gas Tax Increase For Deficit Reduction

American Government Special Collections Reference Desk

American Government

No Gas Tax Increase For Deficit Reduction

Congressman Glenn M. Anderson
Congressional Record: 101st Congress
9 February 1989

Mr. ANDERSON. Mr. Speaker, the American Association of State Highway and Transportation Officials, known to all of us as AASHTO, recently published a very informative booklet opposing the use of Federal motor fuels taxes for deficit reduction. The information provided clearly shows that the use of gasoline and diesel taxes to reduce the deficit would be regressive, unfair to rural commuters who do not have access to mass transit, and harmful to our economy. I urge my colleagues to join the bipartisan leadership of the Committee on Public Works and Transportation and more than 120 cosponsors in support of House Resolution 41, opposing the use of motor fuels taxes for deficit reduction.

Mr. Speaker, I include for the Record the AASHTO booklet as well as the list of 121 cosponsors of House Resolution 41.

No Use of Motor Fuel Taxes for Deficit Reduction



`The federal highway motor fuel taxes are collected from highway users for the sole support of transportation programs, and revenues collected are dedicated to this purpose. Motor fuel taxation should continue to be used only to support transportation, and should not be employed for deficit reduction or general government purposes.

`Similarly, aviation user fees are collected from air passengers for the sole support of the nation's aviation programs, are dedicated to this purpose as defined in the aviation authorizing legislation enacted by Congress, and should not be employed for deficit reduction or general government purposes.'--AASHTO Policy Committee December 4, 1988.


A major increase in motor fuel taxes for deficit reduction purposes would damage, not improve, the nation's economy.

A recent study by the Wharton Econometric Forecasting Associates estimates that a gasoline tax of 10 cents per gallon would reduce the Gross National Product by $10 billion in the first year alone, eliminating 80,000 jobs, and cutting automobile production and housing construction.

A motor fuel tax increase would not reduce the deficit in proportion to the size of the increased tax levy, because of the damage such a large motor fuel tax increase would do to our economy.

According to a study by Data Resources, Inc., a private consulting group, each dollar of additional fuel tax revenue will reduce the deficit by only 27 cents.

A large motor fuel tax increase for deficit reduction purposes would act to cut overall transportation funds at all levels of government, at a time when increases are needed to keep America moving.

The U.S. Department of Energy estimates that a tax increase of 25 cents per gallon on motor fuels would decrease 1990 fuel tax revenues by $416 million at the federal level, because of a drop in fuel consumption. State fuel tax revenue is estimated to decline by twice that amount, resulting in a combined loss of transportation revenues of an estimated $1.2 billion per year.

States rely heavily on highway user fees, such as motor fuel taxes, to fund state transportation program. In 1987, highway user fees accounted for 81.2 percent of the $32.8 billion total of state highway receipts, an increase of some $1.3 billion in user fees over the 1986 level.

Use of the motor fuel tax for deficit reduction places a heavier burden on those with low incomes, who devote a larger share of their income to motor fuel purchase than do the wealthy.

The House Public Works and Transportation Committee recently reported that 78 percent of Americans earning less than $10,000 a year commute to work by private motor vehicle. These low-income gasoline users would pay more than three times as much for deficit reduction relative to their income as more affluent motorists.

Because residents in larger, more rural states must drive many more miles than those living in compact urban states, they will be unfairly called upon to pay more per person to reduce the national debt owed by all Americans.

For example, the average motorist in Hawaii uses only 568 gallons of gasoline per year, according to the U.S. Department of Transportation. An average motorist in Wyoming uses 949 gallons of gasoline per year, and would pay 1.7 times as much for deficit reduction.


The Federal-aid Highway Program has helped America constuct the finest highway system in the world, on an essentially pay-as-you go basis. Key to this success has been a long standing compact between highway users and the federal and state governments, whereby motor fuel taxes are levied and collected with the pledge that revenues from the taxes will be used only for transportation purposes.

If federal motor fuel taxes should be employed for deficit reduction or other purposes, it would break this long standing compact, do harm to the nation's transportation system, and be unfair to highway users.

The nation's transportation needs exceed available funding, and for this reason alone the motor fuel tax should not be taken for other purposes. Beyond this, utilizing motor fuel taxes for deficit reduction purposes unfairly shifts the deficit burden onto highway users in those states where highway distances are long.

Using dedicated user fees for deficit balancing purposes has the potential to destroy public confidence in federal and state transportation programs supported by these fees.

Funded in 1914, AASHTO is comprised of the departments concerned with transportation and highways in the 50 states, the District of Columbia and Puerto Rico.



H. Res. 41--Gasoline and Diesel Fuels Tax Resolution 121 Cosponsors as of February 9, 1989

The Honorable Glenn M. Anderson (CA).
The Honorable Bob Roe (NJ).
The Honorable Norm Mineta (CA).
The Honorable Jim Oberstar (MN).
The Honorable Henry Nowak (NY).
The Honorable Nick Joe Rahall II (WV).
The Honorable Douglas Applegate (OH).
The Honorable Ron de Lugo (VI).
The Honorable Gus Savage (IL).
The Honorable Doug Bosco (CA).
The Honorable Robert A. Borski (PA).
The Honorable Joe Kolter (PA).
The Honorable Tim Valentine (NC).
The Honorable Edolphus Towns (NY).
The Honorable Bill Lipinski (IL).
The Honorable Peter Visclosky (IN).
The Honorable Louise Slaughter (NY).
The Honorable John Lewis (GA).
The Honorable Peter DeFazio (OR).
The Honorable Bill Grant (FL).
The Honorable Jimmy Hayes (LA).
The Honorable Bob Clement (TN).
The Honorable Lewis Payne (VA).
The Honorable Jerry Costello (IL).
The Honorable Frank Pallone, Jr. (NJ).
The Honorable Greg Laughlin (TX).
The Honorable John Paul Hammerschmidt (AR).
The Honorable Bud Shuster (PA).
The Honorable Arlan Stangeland (MN).
The Honorable Newt Gingrich (GA).
The Honorable Bill Clinger (PA).
The Honorable Bob McEwen (OH).
The Honorable Thomas E. Petri (WI).
The Honorable Ron Packard (CA).
The Honorable Jim Lightfoot (IA).
The Honorable J. Dennis Hastert (IL).
The Honorable James Inhofe (OK).
The Honorable Fred Upton (MI).
The Honorable Bill Emerson (MO).
The Honorable Larry Craig (ID).
The Honorable John Duncan, Jr. (TN).
The Honorable Mel Hancock (MO).
The Honorable Chris Cox (CA).
The Honorable Tony Coelho (CA).
The Honorable Matthew Martinez (CA).
The Honorable James H. Bilbray (NV).
The Honorable Harold Volkmer (MO).
The Honorable Dan Akaka (HI).
The Honorable Ron Coleman (TX).
The Honorable Mervyn Dymally (CA).
The Honorable Glenn English (OK).
The Honorable Bart Gordon (TN).
The Honorable Charles Hayes (IL).
The Honorable Bill Hefner (NC).
The Honorable Tim Johnson (SD).
The Honorable Walter Jones (NC).
The Honorable Jim Jontz (IN).
The Honorable Carl Perkins (KY).
The Honorable Martin Lancaster (NC).
The Honorable Charles Hatcher (GA).
The Honorable Mike Andrews (TX).
The Honorable Dan Glickman (KS).
The Honorable Lane Evans (IL).
The Honorable Jamie Clarke (NC).
The Honorable Frank McCloskey (IN).
The Honorable Robin Tallon (SC).
The Honorable Tommy Robinson (AR).
The Honorable Richard Stallings (ID).
The Honorable Jim Chapman (TX).
The Honorable George Hochbrueckner (NY).
The Honorable Carroll Hubbard (KY).
The Honorable Bill Sarpalius (TX).
The Honorable John Tanner (TN).
The Honorable Dean Gallo (NJ).
The Honorable Virginia Smith (NE).
The Honorable Sonny Callahan (AL).
The Honorable Robert Lagomarsino (CA).
The Honorable Joe Barton (TX).
The Honorable Robert Dornan (CA).
The Honorable Elton Gallegly (CA).
The Honorable Norman Shumway (CA).
The Honorable Barbara Vucanovich (NV).
The Honorable Frank Horton (NY).
The Honorable Chuck Douglas (NH).
The Honorable Dave Martin (NH).
The Honorable Jim Courter (NJ).
The Honorable Tom DeLay (TX).
The Honorable William Broomfield (MI).
The Honorable Gerald Solomon (NY).
The Honorable Larry Combest (TX).
The Honorable Arthur Ravenel, Jr. (SC).
The Honorable Robert C. Smith (NH).
The Honorable Buz Lukens (OH).
The Honorable Thomas Bliley, Jr. (VA).
The Honorable Jack Buechner (MO).
The Honorable Pat Roberts (KS).
The Honorable David Dreier (CA).
The Honorable Matthew Rinaldo (NJ).
The Honorable Bob Livingston (LA).
The Honorable Helen Delich Bentley (MD).
The Honorable William Dannemeyer (CA).
The Honorable Dan Burton (IN).
The Honorable James H. Quillen (TN).
The Honorable John G. Rowland (CT).
The Honorable Lamar Smith (TX).
The Honorable Bob Stump (AZ).
The Honorable Thomas Tauke (IA).
The Honorable Porter Goss (FL).
The Honorable John Hiler (IN).
The Honorable Dana Rohrabacher (CA).
The Honorable Bill Paxton (NY).
The Honorable Bob Whittaker (KS).
The Honorable Jack Fields (TX).
The Honorable Howard Coble (NC).
The Honorable John Myers (IN).
The Honorable James Sensenbrenner (WI).
The Honorable Phil Crane (IL).
The Honorable Paul Gillmor (OH).
The Honorable Richard Armey (TX).
The Honorable Richard Baker (LA).
The Honorable Mickey Edwards (OK).

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