An accord between President Obama and carmakers to sharply boost automobile fuel efficiency will drain tens of billions of dollars from federal road funds, said the American Road & Transportation Builders Association.
The group estimates by sharply reducing average vehicle fuel use, the proposed standards to take effect from 2017 to 2025 will cost the government $65 billion in motor fuel tax receipts. The revenue stream is the principal source of income for the Highway Trust Fund.
ARTBA President Pete Ruane said it would be like eliminating all federal highway funding for nearly two years, given the projected pace of trust fund spending.
That is on top of a $9 billion projected revenue loss from implementing standards already on the books to increase average fuel efficiency of cars and light trucks from 28.3 miles per gallon to 34.1 by 2016. The new plan will sharply increase that to 54.5 mpg in phases starting in 2017, for a total estimated impact on the trust fund through 2025 of $75 billion.
“We are supportive of efforts to reduce carbon emissions and improve fuel economy,” Ruane. “However, from a public policy perspective, this is a classic case of the left hand not knowing what the right hand is doing."
Key lawmakers drafting new transportation legislation have ruled out raising taxes on gasoline and diesel fuel to bolster the trust fund. But they have warned that the fast spread of alternative-fuel and high-mileage vehicles puts more cars on the nation’s roads and bridges that pay little or nothing to use that infrastructure.
The ARTBA analysis does not appear to factor in another looming hit on trust fund collections. The administration has also announced preliminary rules to push commercial truck fleets for the first time to boost their fuel efficiency, which would reduce diesel fuel use and tax collections.
But the group said the pending transportation legislation “provides a ripe opportunity for [the U.S.] Congress and the president to identify all possible options to generate the revenues necessary to maintain and improve the system.”
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