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The move by some states to soothe the sting of soaring fuel prices by temporarily suspending diesel fuel taxes has some unlikely opponents: truckers, the very people it’s supposed to help.
Trade groups representing truckers argue that the suspensions won’t have much benefit to them and that it would mean less money to maintain the roads that they must travel.
“It probably wouldn’t have much of an impact,” Darrin Roth, vice president of highway policy for the American Trucking Associations, said. “Most of those savings wouldn’t be passed onto consumers. The long-term cost, if the money is not replaced, would be our already deteriorating infrastructure would deteriorate more. That’s more of a concern than a couple of cents change in the price of gas from our perspective.”
States around the country, struggling to come up with relief for motorists as high prices soared even further after Russia’s invasion of Ukraine, have seized on reducing fuel taxes. Gasoline and diesel taxes in Maryland have been suspended as the state halted collections of its approximately 37-cents-per-gallon motor fuel tax for 30 days. Georgia has also suspended its 29-cents-per gallon gas tax and 33-cents-per-gallon diesel tax until May 31.
A proposal under consideration in Congress would suspend the national gasoline tax for the rest of the year, but leave the diesel tax in place.
Todd Spencer, president of the Owner-Operator Independent Drivers Association, which represents truck drivers who are not affiliated with large trucking companies, also opposes the idea of suspending diesel tax at the state and federal levels. He said it is “not a given” that such a move would lower diesel gas prices for truckers because fuel suppliers may pocket some of the savings.
“The only thing that is going to reduce fuel prices in any sort of measurable way is a cut back in demand,” Spencer said.
The average price of a gallon of diesel fuel in the U.S. was $5.04 on Wednesday, according to the automobile club AAA.
Earlier: Soaring Diesel and Gasoline Prices Are Bleeding Into Shipping
Gas and diesel taxes brought in $37 billion at the federal level in 2020, with $10.5 billion coming from diesel, according to the Congressional Budget Office. The money comprises about 90% of the revenue that goes into the U.S. Department of Transportation’s Highway Trust Fund, used by the federal government to distribute money to states for infrastructure projects.
Motor fuel taxes are typically collected at both the federal and state level. At the federal level, 18.4 cents per gallon for gas and 24.3 cents per gallon for diesel goes to the federal government.
Legislation introduced last month by Senator Raphael Warnock, a Georgia Democrat, would suspend the 18.4 cent federal tax until next Jan 1. The legislation is co-sponsored by Democratic Senators Mark Kelly, Maggie Hassan, Debbie Stabenow, Catherine Cortez Masto and Jackie Rosen.
Warnock’s bill excludes diesel taxes and includes a provision directing the U.S. Treasury to make transfers from other areas of the federal budget in the interest of “maintaining the integrity of the Highway Trust Fund” during the gas tax holiday.
Some Republicans have criticized the idea of a gas tax holiday, opting to instead blame Biden for the high prices by arguing that his energy policies were contributing to increase even before the recent Russian invasion of Ukraine.
“To me it’s just a band-aid on a bullet hole,” Senator John Barrasso, a Wyoming Republican, said of Democratic proposals to suspend the federal gas tax for the rest of the year in a press conference at the Capitol on Wednesday.
Reverse Momentum?
Susan Howard, director of policy and government relations for the American Association of State Highway and Transportation Officials, said a suspension of the federal gas tax for the rest of the year would likely cost the Highway Trust Fund $20 billion in lost revenue. Such a move, she warned, would reverse momentum for transportation projects that was generated by the bipartisan $550 billion infrastructure law signed by President Joe Biden last year.
“There’s no guarantee consumers would see a benefit and we will have just created another hole we’ll have to dig ourselves out of,” she said.
As recently as last year, some lawmakers were considering increasing the federal gas tax to help close a yawning gap in federal highway funding that is estimated to be as high as $13 billion before the passage of the infrastructure law.
That’s because the Highway Trust Fund is financed primarily through the federal gas tax. That and other fees bring in $43 billion per year while federal spending topped $56 billion annually before the infrastructure bill was passed last November, according to the Congressional Budget Office.
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