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CAFE Standards and TSPLOST

Originally Published Sep 4, 2011, 11:44pm (Updated Sep 4, 2011, 11:44pm)
22 comment(s)

CAFE standards are the average fuel economy of passenger cars or light trucks sold in the United States. CAFE standards were enacted by the Energy Policy Conservation Act of 1975 and are imposed by the National Highway Traffic Safety Administration (NHTSA). The average fuel economy mandated by NHTSA has risen from 18 mpg in 1978 to 36 mpg in 2012. In 2025 those standards are set to rise to 54.5 mpg. Higher CAFE standards are reducing the number of gallons of fuel sold, which is causing tax receipts per gallon to fall. TSPLOST is simply a compensation to the reduced per gallon tax receipts, because TSPLOST taxes retail sales in the State of Georgia. The entire situation is simply the outcome of government central planning and unscrupulous politicians.

Gas Tax

Georgia needs to stop sending federal fuel tax dollars to Washington DC, because Georgia is a gas tax losing state. According to the Environmental Working Group "Taxpayers in fifty-four metropolitan areas lost an estimated 100 million dollars or more during the 6-year period analyzed." Atlanta alone was shorted $787M, nearly $1.0B over a five year period from 1998 to 2003. Figure 1 illustrates the total federal and state fuel taxes collected in the state of Georgia. According to the United States Department of Transportation (USDOT), total taxes raised in the State of Georgia from 2004 to 2010 exceeded $7.2B. Federal fuel taxes collected in Georgia and sent to the USDOT exceeded $8.2B. Georgia would be much further ahead if we just stopped sending this fuel tax to Washington DC. What are they going to do? Threaten to stop sending us Highway Trust Fund (HTF) dollars?

Highway Trust Fund

According to the Congressional Budget Office HTF is going broke and there is less money to send to the states for road repairs and mass transit. Figure 2 illustrates the dire straits that HTF finds itself. In September 2011 outlays will exceed tax revenues, interest, and general funding. The HTF was created in 1956 to build the Eisenhower Interstate System (I-85, I-95, I-75 etc.). The last stretch of highway was completed in 1992, but the politicians in Washington DC have been using the HTF as a slush fund to reward cronies with bridges to nowhere, mass transit projects, and regional road building. Since 1998 the shortfall from tax revenues and interest has been made up with general operating funds, but it is becoming more-and-more difficult to find the funds to make up the shortfall. This week President Obama and many Congressional leaders called for shifting the burden of road repairs and mass transit back to the states. The HTF is broke and no longer has the funds to send to the states.

The amount of money to be distributed by the HTF is going to fall-off dramatically and the states will be left holding the bag; particularly those who continue to send collected federal fuel taxes to Washington DC. The REAL dollars collected within the State of Georgia are going to drop precipitously as CAFE standards rise and less gallons of fuel are sold. This is the reason TSPLOST was conjured up. TSPLOST taxes the dollar value of all retail transactions $.01 cent per dollar across the state. The economics of TSPLOST is simple. 

As CAFE standards rise, fewer gallons of gas are sold. This causes the price of fuel to rise, which further lowers the number of gallons sold. Collecting taxes on a per gallon of fuel sold basis is a losing proposition, but collecting taxes on the total dollar value of retail sales across the state becomes a pot of gold. According to HB 277 Transportation Investment Act of 2010 it is expected that TSPLOST will raise $1.5B annually from 2013 to 2023. This means TSPLOST will raise an additional ~$15.0B in addition to forecast collections of ~$10.0B in Georgia fuel tax and ~$12.0B in federal fuel taxes. If Georgia withholds sending federal fuel taxes to Washington DC it will mean that Georgia has $22.0B on hand for roads, bridges, mass transit, and repairs without TSPLOST. With TSPLOST $37.0M. This is ridiculous. Taking $37.0B out of the private sector and putting it into the government will destroy jobs and economic growth. Why would anyone even consider such economic nonsense?

The HTF slush fund is collapsing and going away. TSPLOST is simply a slush fund to replace the HTF slush fund. The TSPLOST slush fund is meant to dole out billions by unelected bureaucrats to cronies of the Chamber of Commerce. In return the politicians under the Gold Dome will line their campaign coffers and reap personal rewards. TSPLOST is big government socialism and redistribution of wealth perpetrated by government under the guise of legal plunder. Georgia can pay for all needed road repairs with a combination of Georgia fuel taxes and withholding all payments of federal fuel taxes to Washington DC. 

Comments

22 comment(s) on this page. Add your own comment below.

Nolen Cox
Sep 5, 2011 7:19am [ 1 ]

The T SPLOST is a regional tax. There are 17 other counties in my region, they can vote my county a tax it doesn't want. We already have a LOCAL Option and a special purpose SPLOST. The state has been dipping into the transportation funds for education and welfair which have verry low or no returns. We need better managment not more taxes.

Ed Painter
Sep 5, 2011 10:27am [ 2 ]

I am in general agreement with the description of the TSPLOST and opposing it for many of the reasons listed. However, I do not go along with violating the Constitution to get the funds necessary to pay for road repairs. The federal fuel tax is collected under authority of Section 8. To convert it for use by the state would likely be illegal and certainly violate the oath the Governor has taken to uphold the Constitution. Many of us have taken the same oath one or more times and take it seriously.

Rene Stover
Sep 5, 2011 10:35am [ 3 ]

It is obvious that there is more to the CAFE requirement for a continued increase in fuel milage than meets the eye. If the fuel quality of the 1960s were restored, the automobiles would be getting much higher milage, because the technology of modern automoblies far exceeds that of the 1960s when a 350cui Chevrolet impala was getting 18- 20 miles per gallon at interstate hwy. speeds of 70 mph. The quality of fuel today is very poor, and the Federal Government totally ignores that issue altogether. As for the States collecting sales tax to send to the Federal Government, it is a no brainer, we should not do it! We are just giving them more amunition to control us. Wake up our state representatives!

Bill Evelyn
Sep 5, 2011 10:42am [ 4 ]

@Ed Painter. I would agree with your Constitutional assertion if you could point-out where in Article 1, Section 8 the Congress has the authority to fund interstate highway construction.

The taxation language in Article 1, Section 8 only applies to defense, post offices, and post roads, salaries of congress people, judges, etc. Not interstate highway systems.

Dave Richard
Sep 5, 2011 11:42am [ 5 ]

"I would agree with your Constitutional assertion if you could point-out where in Article 1, Section 8 the Congress has the authority to fund interstate highway construction."

OMFG!

First, Bill, I'll point out that the argument that "It isn't specifically in the Constitution" is the most sophomoric argument that faux Tea Partiers use to try to make a lame excuse for un-Constitutionality. A six-year old knows the the Constitution isn't an enabling document (therefore it wasn't design to enumerate each and every activity of government), but is a LIMITING document, so specific "powers" cannot be found in the Constitution by and large.

Next, you might wish to do a little research on the Eisenhower Interstate System before you go spouting your defense argument. I'll even help you:

http://en.wikipedia.org/wiki/InterstateHighwaySystem

Lord save us from pseudo Constitutional experts.

Ed Painter
Sep 5, 2011 11:47am [ 6 ]

This red herring (interstate highway authority) is a little too smelly for consumption. THE issue you raised is converting federal taxes to state coffers. Plunder they may be, but legal is the operative word.

Bill Evelyn
Sep 5, 2011 11:48am [ 7 ]

OK genius. If the constitution can just be changed willy nilly whenever it meets some desire, why write it down?

The Constitution is a document, law of the land, that tells the Federal government can do to us. The Bill of Rights are further restraints on the Federal government that tells the Feds what it can't do to us.

The Highway Trust Fund is broke. The original intent was completed in 1992, but the criminals in Washington DC use the fund as a slush fund to fund bridges to no where. Remember the Gravina Island Bridge?

I see no mention of defense as an argument in this article.

Bill Evelyn
Sep 5, 2011 11:52am [ 8 ]

@ED. I've already broached the subject with Terry England Chair of the Appropriations. I think Georgia was already looking into the fact this was a loser.

It would be perfectly legal for the state to tell the FED's. 'We are no longer sending you this money and we don't expect any in return.'

Rene Stover
Sep 5, 2011 12:18pm [ 9 ]

Bill,

I believe these people should read Col. Davey Crockett's response concerning his wrongful vote to appropriate money for a charitable cause when he was in the US House of Representatives.

Maybe they would understand that if an Interstate Highway System or anything else is to be done, it should be done in agreement with the states concerned, and the individual state would pay for their portion of the system, and should be completed by the construction industries within the state where the road is built. I also believe this should be accomplished by a majority vote of the people in those states individually.

Just my belief!

Rene

The constitution is the Law of Our Land, and violators of that law should be prosecuted!

Ed Paintr
Sep 5, 2011 2:05pm [ 10 ]

Bill, I have read your article and comments several times and fail to find a logical position in regards to state authorities unilaterally converting federal taxes for their own use. Since you are claiming that this is 'perfectly legal', perhaps you can point to an example. BTW Section 8 - "The Congress shall have the Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States;".

Bill Evelyn
Sep 5, 2011 2:17pm [ 11 ]

@Ed. Surely within the confines of Article 1 Section 8. If you want to make the argument the Highway Trust Fund is defense, that's fine. The problem now is that money is no longer being used to build the interstate highway system. So therefore it would not be constitutionally authorized to build bridges to no where.

I ask you to read this article most importantly paragraph 3. http://www.heritage.org/research/reports/2011/07/federal-highway-transportation-program-why-states-should-opt-out

Bill Evelyn
Sep 5, 2011 2:19pm [ 12 ]

"Because the plan is voluntary, states that preferred to operate under presidential and congressional micromanagement and regulation and the whimsy of fashionable opinion could “opt in” and continue to serve their transportation needs in the warm embrace of Washington’s bureaucracy. At the same time, states opting out would have to agree to maintain certain standards of performance, including safety and interstate maintenance, and would also be required to use these freed-up funds on surface transportation projects as opposed to other public purposes such as health care or education."

Ed Painter
Sep 5, 2011 3:04pm [ 13 ]

I make no argument about the HTF one way or the other, but there is a minor term in Section 8 that is usually referred to as the 'general Welfare' clause. HTF is still the law and if a state lawmaker or anyone else thinks it is unconstitutional they should challenge it in court. The Heritage Foundation article makes no assertion that the states should unilaterally keep federal funds, it is recommending that the law should be changed. They do not even mention the constitutionally of the law.

Dave Richard
Sep 5, 2011 5:14pm [ 14 ]

"If the constitution can just be changed willy nilly whenever it meets some desire, why write it down?"

It can't be. But you're the only one thinking it has been.

"The Constitution is a document, law of the land, that tells the Federal government can do to us."

No, it is a document that specifically LIMITS the power of the government. It does not tell government what it can do.

Bill Evelyn
Sep 5, 2011 6:08pm [ 15 ]

Dave. Listen. You are so far offbase with your thoughts it's like teaching a kindergartener algebra. The Constitution is a form of government. If you follow the precepts in the constitution you have a limited government. But it is simply a form of government.

The constitution has most assuredly been changed. Look at the scope and departments enacted by both parties over the past 60 years. The Constitution is dead in practice. In theory it is still recorded on paper.

The Constitution tells the Federal government exactly what it is allowed to do to us, the Bill of Rights restrains the government even more than the Constitution.

Bill Evelyn
Sep 5, 2011 6:11pm [ 16 ]

@Ed. If I did not know you better I'd say you were a bleeding heart liberal with your reading of the the general welfare clause.

That clause means the general welfare of the constitution that is written, not some made up instrument that has been shoved down our throats. It means the general welfare of the limited scope of authority given to the federal government.

The federal tax is illegal now arguably before, and the states should keep this money for themselves or stop collecting it and make gasoline cheaper for the citizens.

Ed Painter
Sep 5, 2011 7:33pm [ 17 ]

If anyone actually reads all these comments I'm certain that they will appreciate the lessons in constitutional interpretation as much as I. Perhaps you can find a legislator that will introduce a bill (maybe Terry England) to force the Governor to stop collecting these illegal taxes or at least keeping them if he does collect them.

Dave Richard
Sep 6, 2011 7:54am [ 18 ]

"The Constitution is dead in practice."

Normal people would disagree with you.

Bill Evelyn
Sep 6, 2011 9:31am [ 19 ]

@Ed. I've asked twelve solid members of the senate and house to look into this.

Bill Evelyn
Sep 6, 2011 9:33am [ 20 ]

http://www.amazon.com/Who-Killed-Constitution-Government-American/dp/0307405761

@Dave. Before you make a fool of yourself, try reading this book, then comment.

Dave Richard
Sep 6, 2011 7:58pm [ 21 ]

Sorry, I don't do extremist.

I don't need someone to tell me what I can figure out for myself.

Jack Gleason
Nov 3, 2011 11:49pm [ 22 ]

@ B.E.: (re: RTFB) "I don't need someone to tell me what I can figure out for myself"

Damn...you may've actually gotten through to the Man!

Regarding Transportation Projects in Georgia?

One thing's for damn sure:

SOMETHING needs "Change", and if it's Georgia keeping Georgian Revenue (back) to then fund Georgia Hi-ways -- especially those otherwise ignored-of-past for for (both) lack of Federal Funding (for the return of at least SOME pittance of Our State Contribution!), and well no-less, the mal-prioritization of "Projects" the likes of I-75 South of Macon to the Florida State Line when North Georgia needs of a viable East-West Connector only CONTINUE going ignored!

Exhibit A: What of any significant improvements to State Hwy. 20 -- other than three "Improved Intersections" of that dumb-assed dog-leg dead-center through the City of Cumming -- are being proposed of the T-SPLOST ???

Other "Improvements" slated within Forsyth County are already inclusive of SPLOST VII if not the last THREE SPLOST's "Passed", so WTF ?!?

Answer: NONE!!!

Solution: FAIL T-SPLOST...unless some reason and sanity can come unto an otherwise un-reasonable and insane GDOT...IMHO!

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