ARTBA versus FHA

It's ARTBA versus the Federal Highway Administration (FHA). A recent press release issued by FHA, commenting on the Traffic Volume Trends report for October, claimed that the 100-billion-mile decline in vehicle miles traveled on the nation’s highways during the past year was the reason why Highway Account revenues in FY 2008 were $3 billion less than in FY 2007. The release concluded that, “banking on the gas tax is no longer a sustainable option” to finance transportation investment in America.

According to ARTBA, the release seriously distorts the facts. The decline in Vehicle Miles Traveled (VMT) this year, while worrisome, was not why Highway Account revenues were $3 billion less in FY 2008 than in FY 2007, ARTBA said.

The association maintains:
* Revenues from the federal excise tax on gasoline in FY 2008 were, in fact, almost unchanged from FY 2007. While revenues did slip during the second half of the fiscal year with the decline in VMT, the federal gasoline tax actually generated $20.98 billion for the Highway Account in FY 2008, down only $70 million or 0.3 percent, from $21.05 billion in FY 2007. This accounted for just 2 percent of the $3 billion decline in Highway Account revenues.
* Total revenues from all federal excise taxes on motor fuel were actually $185 million higher in FY 2008 than in FY 2007. Although revenues from gasoline taxes were down $70 million, revenues from the tax on diesel fuel actually rose $256 million for a net increase of $185 million.
* The real reason for the $3 billion decline is that revenues from taxes on heavy trucks, mainly the 12 percent tax on retail sales of trucks and trailers, were down more than $2.4 billion in FY 2008. This accounted for 80 percent of the revenue decline and is consistent with reports that sales of new heavy trucks plummeted in 2008.
* The remaining 20 percent of the decline in revenues was a transfer of just over $700 million of taxes on kerosene to the Airport and Airways Trust Fund (AAFT) and the General Fund in FY 2008.

ARTBA said, in summary, that while revenues into the Highway Account were indeed $3 billion less in FY 2008 than in FY 2007, it was not due to the decline in VMT as U.S. DOT claims. The U.S. DOT misused that data to suggest the federal motor fuels tax can no longer finance federal investments in highway and mass transit improvements. The data in fact suggest that the federal motor fuels taxes can remain a viable source of revenues for highway investments for the foreseeable future. The trust fund’s real problem is not the decline in VMT, but rather the economic slowdown and the fact the federal motor fuel tax rates have not been changed since 1993. Your comment?