Proposals to Reduce Federal Fuels Taxes Would Devastate Improvement Programs
28 February 2000
Proposals to Reduce Federal Motor Fuels Taxes Would Devastate State Highway Improvement Programs & Cost 1 Million Jobs, Analysis Finds WASHINGTON, Feb. 25 -- Two proposals surfaced in Washington,
D.C., this week to reduce federal motor fuels excise taxes would have a
devastating impact on state transportation improvement programs and could
eliminate more than one million U.S. jobs, an analysis by the American Road &
Transportation Builders Association (ARTBA) shows.
Senator Ben Nighthorse Campbell (R-Colo.) introduced legislation Feb. 24
to repeal the 24 cents-per-gallon federal diesel motor fuels excise user fee
to provide relief to truckers hit by higher fuel prices. The National
Taxpayers Union (NTU) went further Feb. 23 suggesting an "across-the-board" 10
cents-per-gallon reduction in all federal highway user fees.
"Repealing or reducing federal motor fuels excises would have the perverse
effect of retarding road safety and efficiency improvements that benefit
truckers and the general motoring public," ARTBA President Pete Ruane said.
"It would also rob the nation of air quality benefits that accrue from less
congested and well-maintained highways. Both proposals are simply bad public
policy."
The diesel motor fuels excise user fee generates over $8 billion per year
in revenue for the Highway Trust Fund's (HTF) Highway Account. Ten cents of
the federal motor fuels excise generates over $16 billion to the HTF Highway
Account. This revenue is dedicated under the Transportation Equity Act for
the 21st Century (TEA-21) to surface transportation improvements. TEA-21
passed Congress and was signed into law by President Clinton in June 1998.
Ruane said any such repeals would have a severe impact on state highway
improvement programs. The ARTBA analysis found California would lose the
largest amount, $722 million under Sen. Campbell's bill and $1.4 billion under
the NTU proposal.
Ruane said a diesel excise repeal would also eliminate 638,000 U.S. jobs
that are sustained through public investment in highway construction programs-
with a concurrent losses of federal and state income tax revenue and increases
in unemployment-related government expenses. The 10 cents "across-the-board"
cut idea would eliminate 1.3 million American jobs, ARTBA says.
Founded in 1902, ARTBA provides representation for the U.S. transportation
construction industry in the Nation's Capital. The industry generates more
than $160 billion per year in economic activity and provides employment for
2.2 million Americans.
Note: Following is an ARTBA analysis of the potential loss of federal
highway funds to all 50 states under the Senator Campbell and NTU proposals.
Potential Loss of Federal Highway Funds to the States
That Would Result from Proposals to Repeal Federal Motor Fuels Excise User
Fees
(Millions of dollars)
Potential Loss to
Potential Loss to the States from
the States from "Across-the-Board"
Total FY Repeal of 10c Cut in
2000 Federal the Federal Federal
Aid Guaranteed Excise User Motor Fuel
STATE Under TEA-21 Fee on Diesel Fuel Excise User Fees
ALABAMA $579.9 $168.5 $341.4
ALASKA $314.3 $91.3 $185.1
ARIZONA $432.0 $125.5 $254.3
ARKANSAS $389.9 $113.2 $229.6
CALIFORNIA $2,485.0 $721.8 $1,463.1
COLORADO $302.0 $87.7 $177.8
CONNECTICUT $394.6 $114.6 $232.3
DELAWARE $108.2 $31.4 $63.7
DIST. OF COL. $102.8 $29.9 $60.5
FLORIDA $1,186.5 $344.6 $698.6
GEORGIA $1,125.4 $326.9 $662.6
HAWAII $161.8 $47.0 $95.3
IDAHO $214.1 $62.2 $126.0
ILLINOIS $915.6 $266.0 $539.1
INDIANA $617.8 $179.4 $363.7
IOWA $314.5 $91.4 $185.2
KANSAS $314.3 $91.3 $185.0
KENTUCKY $487.1 $141.5 $286.8
LOUISIANA $465.8 $135.3 $274.2
MAINE $134.5 $39.1 $79.2
MARYLAND $419.1 $121.7 $246.8
MASSACHUSETTS $490.7 $142.5 $288.9
MICHIGAN $881.6 $256.1 $519.1
MINNESOTA $400.7 $116.4 $235.9
MISSISSIPPI $326.6 $94.9 $192.3
MISSOURI $637.1 $185.0 $375.1
MONTANA $247.8 $72.0 $145.9
NEBRASKA $195.8 $56.9 $115.3
NEVADA $224.5 $65.2 $132.2
NEW HAMPSHIRE $137.4 $39.9 $80.9
NEW JERSEY $767.6 $223.0 $452.0
NEW MEXICO $270.0 $78.4 $159.0
NEW YORK $1,345.8 $390.9 $792.4
NORTH CAROLINA $714.1 $207.4 $420.4
NORTH DAKOTA $163.8 $47.6 $96.5
OHIO $1,044.1 $303.3 $614.7
OKLAHOMA $413.9 $120.2 $243.7
OREGON $373.0 $108.4 $219.6
PENNSYLVANIA $1,444.0 $419.4 $850.2
RHODE ISLAND $154.6 $44.9 $91.0
SOUTH CAROLINA $424.5 $123.3 $249.9
SOUTH DAKOTA $213.3 $61.9 $125.6
TENNESSEE $618.4 $179.6 $364.1
TEXAS $1,909.6 $554.7 $1,124.3
UTAH $267.0 $77.6 $157.2
VERMONT $109.5 $31.8 $64.5
VIRGINIA $736.3 $213.9 $433.5
WASHINGTON $506.6 $147.1 $298.3
WEST VIRGINIA $355.9 $103.4 $209.5
WISCONSIN $547.6 $159.1 $322.4
WYOMING $178.8 $51.9 $105.2
PUERTO RICO $86.1 $25.0 $50.7
AMERICAN SAMOA $5.2 $1.5 $3.0
GUAM $12.7 $3.7 $7.5
N MARIANAS $3.2 $0.9 $1.9
VIRGIN ISLANDS $17.4 $5.1 $10.3
STATE TOTAL $27,689.9 $8,043.0 $16,303.2
Source: ARTBA analysis of Federal Highway Administration and U.S.
Treasury data
