Dealer Outlook

Trade Only Dealer Outlook Blog

Should we support a gas tax increase?

It’s a conundrum.

On the one hand, more money in the U.S. Highway Trust Fund will directly benefit boating through the Sport Fish Restoration and Boating Trust Fund. It would mean millions of more dollars for construction of launching ramps, transient boat docks, pumpout facilities, boating safety programs, the Recreational Boating and Fishing Outreach Program and funding for fresh- and saltwater fish programs. Sounds good.

On the other hand, more money for the Highway Trust Fund could ultimately mean a significant increase in the federal gas tax. That would be a downer for boating, an added barrier to boat sales and use. Our past experiences tell us higher gas prices hurt boat sales, particularly at the entry level, and even existing boaters reduce their use and, therefore, fuel sales at marina gas docks drop. Not good.

The question is on the table now, albeit Congress will likely kick the can down the road until next spring. But it could be hot news this week as Congress decides the next step for the Highway Trust Fund that will become insolvent Friday without lawmaker action.

Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., recently presented a bipartisan proposal to raise the gas tax, broaching a dangerous political issue that lawmakers have avoided for many years. It would raise the gas tax by 12 cents over the next two years, increasing it from the current 18.4 cents per gallon to 30.4 cents, purportedly covering the shortfall in the highway fund. Further, it would index future gas tax increases to inflation.

Historically, the original federal gas tax was 4 cents in the 1950s and all revenue was used to build the Eisenhower Interstate Highway System. Notably, the tax was planned to end in 1972. But does Congress ever repeal a tax?

In 1983, President Reagan increased the tax to 9 cents with a penny going into a new Mass Transit Account. In 1990, the tax was upped under President George H. W. Bush to 14 cents with 2.5 cents of the increase going to the highway fund and 2.5 cents to deficit reduction. President Clinton followed suit 21 years ago by raising it to 18.4 cents with the increase going to deficit reduction. Eventually, all the tax went into the trust fund.

The House has already passed a bill for $11 billion from the general fund, but it will only keep the highway trust fund afloat until May 31. The Senate has yet to vote on a similar bill and the Murphy-Corker proposal is still around, albeit not seemingly getting much support. But since we’re talking about Congress here, anything’s possible.

Other ideas have also been floated, ranging from allowing tolls on interstate highways (currently prohibited) to cutting spending elsewhere to fund the Highway Trust Fund. Taking a long view, we know many of our highways and bridges have passed their useful life and must be replaced. The Highway Trust Fund cannot be sustained with the current level of income from the gas tax, meaning additional money must come from somewhere. But where?

So what do you think? Should we support an increase in the gas tax (because we’ll benefit directly from more money in the Sport Fish Restoration and Boating Trust Fund and indirectly with better highways)?

Or should we oppose any proposal to raise the federal gas tax because it could negatively impact boat sales?

 

Comments

2 comments on “Should we support a gas tax increase?

  1. Yacht plumber

    The gas tax is the logical thing to collect the revenue from. If we remember that the tax is per gallon then we realize that the 18.4 cents per gallon was significant when gas was $1 per gallon. Now with gas well over $3 per gallon 18 cents isn’t so much. As a mobile business owner and boat owner I appreciate lower fuel bill but still recognize that money for the infrastructure I rely on is not free. Let’s just not go crazy with the increase. Maybe 12 cents over 2 years is too much too quickly. Maybe spread the increase over a few more years or decrease the amount. What do they pay in Europe for a gas tax? I don’t have hard numbers but it will make all of us feel better about what we pay

  2. Thom Dammrich

    This is only a personal opinion, but support the increased gas tax only if you want good roads and good boating access. If you are satisfied with decaying roads and increasing traffic jams and think we have too much boating access already, then oppose the gas tax increase. Seems to me it is a modest increase considering that it hasn’t been increased in over 20 years and gas consumption has been decreasing in recent years. If you don’t have good road to trailer your boat on and good ramps to put your boat in, you won’t be using much gas in your boat.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.