As Massachusetts prepares to vote on the gas tax, Congress may soon have to do the same.
The federal government is hurtling toward a standoff that could leave roads disintegrating and projects unfinished when federal transportation spending dries up in August.
The gas tax—a scourge of politicians and darling of economists—stands at the center of the debate over how to avert a crisis.
As Vox writes, the government has long assumed that the drivers who zoom across American roadways every day should pay for road maintenance. The transportation budget therefore relies on gas taxes to pay for highway upkeep.
But as the number of drivers on the roads has fallen and cars have grown more efficient, revenue from the gas tax has dwindled. Coffers are drying up.
The Highway Trust Fund, which holds the money collected from the federal fuel tax, is currently slated to run out during August.
Congress appears unlikely to find a permanent solution anytime soon. According to Vox, politicians are often hostile to gas taxes and even the Obama administration has shied away from implementing increases to the gas tax.
Although unpopular among politicians, the gas tax has, perhaps surprisingly, become the darling of economists—even notoriously conservative, tax-averse economists.
N. Gregory Mankiw, a Harvard professor and former advisor to both George W. Bush and Mitt Romney, has long heralded the gas tax as the solution to global warming, road congestion, and dwindling transportation funds.
Mankiw stands at the helm of the “Pigou Club,’’ a group of influential economists who favor the gas tax. Members include Alan Greenspan, Larry Summers, Al Gore, Thomas Friedman, and Paul Krugman, among others.
According to Mankiw, a $1 per gallon gas tax hike phased in over a decade would create a $100 billion revenue boost for the federal government. That sum would help solve the looming transportation crisis. But for a population that tracks the weekly cost of gas to the cent, a $1 hike might not sound all that palatable.
Massachusetts recently passed a law that would tie the gas tax to inflation rates, effectively hiking the tax as inflation rises. The measure boosted the tax three cents. It rose from 21 cents per gallon to 24 cents.
Average voters however, have long been averse to the tax. Shortly after the law was passed, a movement began to overturn it.
Massachusetts voters are now set to decide whether to overhaul the measure this fall, when they vote on a ballot question to eliminate the part of the law that would link future gas tax increases to inflation rates.
The gas industry, as one might expect, has also voiced serious opposition to such tax hikes. As major donors to congressional lawmakers, those companies have considerable sway over whether those hikes generate legislative traction.
So far they have been successful. The federal gas tax has not risen from its current level at 18.4 cents since 1993.
The current crisis may be enough to prompt lawmakers to reconsider the tax. Senator Bob Corker, a Republican of Tennessee, has proposed a bill that would raise the gas tax by 6 cents in 2015 and another 6 cents in 2016.
The Murphy-Corker Bill, like the controversial law passed in Massachusetts, would also index the gas tax for inflation.
Although the measure would likely solve the funding shortfall over the next decade, it seems unlikely to pass, given how averse politicians are to gas taxes.