Americans use less gas, hurt highway trust fund: CBO

[Chief]

http://news.yahoo.com/s/nm/20080710/us_nm/congress_gastax_dc;_ylt=Apw0vfyylRV8U5ighxWJnhwWIr 0F

Thu Jul 10, 7:17 PM ET

WASHINGTON (Reuters) - Declining gasoline purchases, due to higher prices, are hurting the federal fund that pays to maintain the nation's highways, the director of the Congressional Budget Office said on Thursday.

The fund is built on an 18.4 cent tax levied on each gallon of gas. It had been forecast to run out by 2009, but the fund is now shrinking more quickly, Peter Orszag testified to a Senate panel.

"Our March baseline did suggest that it would be exhausted in 2009 and an imbalance of roughly a billion and a half dollars would occur during that time period," he said of the CBO's projections on the fund's future.

"Since March, gas prices have caused gasoline consumption to decline. So the incoming revenue will be lower than what we projected in March and the imbalance in 2009 will be more significant," Orszag added.

Average U.S. gasoline prices have risen some 80 cents per gallon since the end of March to a record $4.11, up $1.13 from a year ago.

The office, which audits the economic impact of congressional bills and programs, will release new projections by the end of summer, he noted.

Orszag also said the soon-to-expire transportation law, known as SAFETEA-LU, had anticipated the depletion of the highway trust fund.

"Many people have wondered why this is occurring and I would just point out Congress purposefully saw the balance in the highway trust fund and tried to have it exhausted by the end of 2009 ... and you're going to come pretty close," he said.

From 1995 to 2000, the fund had a surplus of between $10 billion and $23 billion, according to the CBO, and in 1998 Congress cut $8.017 billion from it.

On Thursday, the Senate Appropriations Committee sent legislation to the full Senate to restore that amount in the coming year as part of a larger infrastructure funding bill. The House Ways and Means committee is considering similar legislation.

The Congress will take up drafting a new transportation bill next session.

The gas tax has become an issue in the presidential election, with presumptive Republican nominee John McCain proposing to suspend the tax for a short period to speed economic recovery. Barack Obama, the expected Democratic nominee, has said suspending the tax would provide little relief.

(Reporting by Lisa Lambert and Georgina Coolidge; Editing by Dan Grebler)


**SCHNIPP**

More proof that "The Feds" don't have any money either, and that puts even greater shadows on projects like Boise Cascade and the CRCP that are both based upon assumptions of vast amounts of Federal largess.

Developing...

[Waterbuffalo]

With GM, Chrysler and Ford moving from trucks, heavy trucks and other more non heavy trucks smaller vans, hybrid trucks and smaller cars that get better gas mileage.

With better gas mileage means lower need for gas equals lower amounts of gas means lower gas taxes. Am I wrong?

Will they take the same tax type of thought that has been going around some of counties where they're going to raise taxes rates to pay for the loss of revenues for bonds and other instruments that must be paid.

If amount of oil and gas use goes down, how are we going to pay for the much needed infrastructure of not just highways but many others?

[Chief]

This is one of the rumored pots of money that "The Feds" have laying around and can just pay for the entire Columbia Crossing Project with.

Hot News Flash: The money is going to be gone sooner than anyone figured, so that means there is even less of it than was projected even last month...

[Waterbuffalo]

"Hot News Flash: The money is going to be gone sooner than anyone figured."

Can you copy that one and put it in the quotables thread?

Now back to the discussion..

Columbia River Crossing is just *one* of the projects that Washington needs. There is also the Chehalis River Interstate 5 bridge that *continues* to flood out almost every year or other year? at 4 to 5 million dollars a day, how many times is it going to take for the amount of trucks that sit idled or have to waste fuel going around this river before the Freight companies demand some action?

Does the Kelso Lonview "lewis and clark" bridge going to need improvements if truckers decided to turn it into a thoroughfare to get around Portland's current idea of "growth planning" to get into the Portland Metroplex.

I could go on and on, on the issue.

You know Chief, I would LOVE to hear Jim Jack's comments. He used to be one of Chris Gregoire's representatives. Ok, Jim lets here what you have to say on the subject of Southwest Washington's bridges and infrastructure. Not speaking of lightrail but the heavy stuff.

[Chief]

Our esteemed "leaders" are out spending the money as fast as they can on questionable if not outright wasteful things that usually come back to bite them.

Seattle's public toilet fiasco comes to mind...

In any case, there is no Federal money available to be tapped for the Columbia Crossing Project, the Boise Cascade development, et al. We have these kinds of budget crunches primarily because of the funky tax structure we cling to, which virtually guarantees a state of continuing crisis by exempting large sections of the populace from carrying their fair share of the burden on just about everything.

What we need is the third leg of the budget stool; a reasonable State personal income tax. That way you could cap the sales tax at around 5% and leave it there, as well as making significant cuts in the residential property tax. Businesses would benefit too because there would not be as much pressure to tap them for more State B&O taxes.

Oregon needs to do much the same thing by instituting a reasonable sales and use tax, which would give property owners a much needed tax break along with lowering their personal income tax rates.

Most States con't have the fiscal problems we do, or the perpetual shortages of cash, because they use a balanced, three-legged business model that is stable. If one income source dips, the other two sources may help to level things out and prevent massive budget cuts, or allowing projects to backlog and go stale.

I also recognize how difficult it would be to sell that idea here in Washington and Oregon. People are very stubborn to change, especially if it involves tax policy like I'm talking about.