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Will Congress Increase Gas Taxes In 2014?

Dec 20, 2013

Congress faces a major shortfall in transportation funding in 2014. One idea that has been floated is increasing the federal gas tax, something that hasn’t been down in nearly 20 years. The Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Act (H.R. 3636) has recently been proposed and would phase in a 15 cent per gallon tax increase over the next three years on gasoline and diesel. With the proposal, the federal tax would increase to 33.4 cents per gallon on gas and to 42.8 cents per gallon on diesel. Transportation funding is earmarked to repair and maintain the nation’s infrastructure of roads, bridges and tunnels. A few years ago, the Federal Highway Administration (FHA) announced that over $70.9 billion worth of repairs were needed to maintain safe roads, bridges and other infrastructure around the country. The American Society of Civil Engineers’ (ASCE) 2013 Report Card gave roads in America a grade of “D” and issued Bridges a “C+,” noting that 42% of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. The report also stressed that one in nine of the nation’s bridges are rated as structurally deficient, while the average age of the nation’s 607,000+ bridges is currently 42 years. The ASCE calls for $3.6 trillion in additional investments for all infrastructure with nearly $200 billion earmarked for roads and bridges per year.In addition to the ASCE, the proposed legislation has gained the support of United Parcel Service (UPS); the Association of Equipment Manufacturers; U.S. Chamber of Commerce; National AFL-CIO; and AAA (formerly the American Automobile Association).The UPDATE Act has been moved to committee where it now sits. Time will tell if the legislation gains any steam and is ultimately voted on in the House of Representatives.