Fuel efficiency means less money for roads

By David Tanner, Land Line associate editor | 5/3/2012

If there is a downside to improving fuel economy for cars and trucks, it would be that the Highway Trust Fund misses out on revenue from federal taxes on gasoline and diesel. Scorekeepers in the Congressional Budget Office say the trust fund, which pays for roads, bridges and mass transit, will be short $57 billion by 2040 due to federal efficiency standards.

The Congressional Budget Office, or CBO, evaluated efficiency standards for cars and light trucks from model year 2010 through model year 2025, saying revenue in the trust fund would experience a $57 billion shortfall, a 21 percent drop, by the year 2040.

According to the report, gasoline taxes make up approximately 60 percent of the Highway Trust Fund while diesel taxes generate another 30 percent. The last 10 percent comes from other taxes and fees – including tire taxes, the excise tax on heavy equipment, and the heavy vehicle use tax.

For this particular report, evaluators did not include the first ever standards for medium- and heavy-duty trucks announced last year by the White House. Those numbers would certainly affect the Highway Trust Fund even more once those numbers are added in.

The CBO says policymakers could help balance the books by reducing spending, transferring money from general funds to highways, and/or increasing the gasoline tax or other taxes and fees.

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