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Will New House Bill Raise Gas Taxes for Drivers?

Gas Tax

In the aftermath of the House’s passage of the $325 billion highway bill, the transportation industry is waiting to hear what the cost will be. The bill, designed to improve the nation’s roadways and transit systems, has one major hurdle left to overcome. No one has resolved the issue of how the government will pay for all of this work.

The most commonly-proposed solution is to raise the gas tax. Since the last time the federal gas tax increased was 1993, an increase has been proposed multiple times but it has remained at 18.4 cents per gallon. A proposal to raise that rate by 15 cents was shot down by House Republicans. The Federal gas tax is directly appropriated to road projects, but the growing popularity of more fuel-efficient cars has led to a shortfall of more than $70 billion since 2008.

Transportation Costs

For freight carriers and truck drivers, an increase of 15 cents per gallon would have been devastating to operational costs. But the battle may still not be over. The current transportation funding bill was set to expire on November 20 and the new bill was put in place to avoid a gap. However, it was passed with funding that only covered the first three years of cost for the project. The bill requires Congress to come up with a way to pay for the final three years.

Transportation providers are always the most heavily impacted when fuel costs fluctuate. If a significant tax is added to the per-gallon cost of diesel fuel, freight carriers and trucking companies will be among the most heavily impacted. Tractor-trailers generally get five to seven miles per gallon, with each truck traveling thousands of miles per week. For a transportation provider with a fleet of trucks, a gas tax increase would be multiplied by the number of trucks it had.

Highway Improvements

In addition to the fear of a future gas tax increase, transportation providers are now dealing with a series of new highway projects that will be spread over the next six years. When roads are under construction, speed limits drop, often forcing drivers to travel at a slower rate through many major cities. At times sections of the interstate may even be closed during periods of construction forcing drivers to take a longer route to get where they are going.

In the long run, however, road improvements will be a plus for trucking companies and freight carriers, since they’ll make the nation’s roads more travelable. The bill mentions the many deteriorating bridges and roadways that will be repaired as a result, which means drivers will enjoy a safer, more comfortable ride as they carry deliveries from one point to another.

Even if the new bill doesn’t increase the sales tax on fuel, it will likely result in temporary inconveniences for drivers and fleet managers. It will be more important than ever to have systems in place that get up-to-date information on construction zones and traffic congestion to keep fleets moving as smoothly as possible.