Gas tax end might not lower gas prices

But could cause chaos

David Crossley, Aug 15, 11.

Fresh off a nasty battle over FAA funding that affected the federal tax on airplane tickets, members of Congress may soon clash over the tax that motorists pay at fuel pumps, according to a story in the Fort Worth Star Telegram:

The tax is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel. But because of a quirk in federal law, the federal government’s authority to levy most of that tax and spend the money on highway and transit projects nationwide expires Sept. 30.

Congress, in recess until after Labor Day, could simply reauthorize the tax. But some officials in Washington are concerned that lawmakers will balk at the idea; doing so could have serious consequences.

“It would be far worse than the FAA shutdown,” Victor Mendez, administrator of the Federal Highway Administration, told the Star-Telegram this week. He was referring to what happened at the Federal Aviation Administration in late July and early August, when thousands of federal workers went without pay before Congress finally restored the FAA’s operating authority and the ticket tax.

Mendez, speaking after an appearance at a Texas Transportation Summit in Irving, said he worries that some members of Congress might see the gas tax situation as an opportunity to take an anti-tax stand. The result, he said, could be thousands of highway and rail construction workers nationwide thrown off their jobs.

[snip]

A drop in federal gas taxes would not necessarily mean cheaper fuel, as North Texas officials were told when briefed this week on the possibility of a Washington gas tax showdown.

“The QuikTrips and Finas of the world are going to make a lot of money,” Tarrant County Judge Glen Whitley said. “I bet you our gas prices don’t go down, like our airline ticket prices didn’t go down. I think it’s a good time to send a message to our members of Congress. Don’t let happen to us what happened to the FAA.”

But a QuikTrip spokesman said that if the federal tax went away, the price would immediately drop by that amount, though it might not stay there.

“Whatever the law is, we’ll do it,” spokesman Mark Thornbrugh said. “Whatever happens the following day and the following day after that is more a matter of market conditions.”