STATE LEGISLATURES MAGAZINE
Cheap Gas Fuels Tax Talk
With gasoline prices at the lowest this country has seen since mid-2008, raising taxes on gas and diesel fuel has become a hot topic not only in Congress, but also in statehouses. As of Feb. 6, lawmakers in at least 12 states had proposed increases in motor fuel taxes, either by setting a new fixed amount or by indexing it to inflation.
According to state highway departments, many roads, highways and bridges are deteriorating, and new ones are not being built, due to a lack of funding. Some lawmakers believe now is a good time to reduce the growing gap between infrastructure needs and declining revenues.
For months, states have been uncertain about the future of federal transportation funding. Groups like AAA, the U.S. Chamber of Commerce and the American Trucking Association support increasing what they call the federal fuels user fee “to provide a reliable revenue stream to support jobs, address maintenance needs and provide Americans with a safe and efficient transportation system.” It hasn’t increased since 1993.
Even if Congress finds a way to pass a long-term bill, more responsibility for paying for transportation likely will fall on states, so lawmakers are showing a greater willingness to take a look at state gas taxes.
But it’s still a hard sell to the public. In a HuffPost/YouGov poll conducted in January, 55 percent of the respondents opposed a proposal to raise the federal gas tax by 12 cents over the next two years and link further hikes to inflation. Only 25 percent approved the increase, while 20 percent were unsure.
Opposition to gas tax hikes comes from groups like Americans for Prosperity, the Club for Growth and the Cato Institute, who argue tax hikes would do nothing to solve the greatest transportation challenge facing the country: congestion. They don’t buy the idea that the roads and bridges are crumbling and argue that the problem is not a lack of funding, but government’s penchant for overspending.
“Rather than raise gas taxes,” writes the Cato Institute’s Randal O’Toole, in a commentary called 5 Reasons Not to Raise the Gas Tax, “Congress should take steps toward implementing a new user fee system that preserves privacy, ends congestion and eliminates highway subsidies.”
Despite the opposition, in 2013, six states and the District of Columbia enacted legislation that allows the possibility of increasing state gas taxes. In 2014, three more followed suit. For example, Virginia replaced its per-gallon gas tax with an innovative hybrid gas tax, which included a new wholesale tax on gasoline and increased the portion of the general sales tax dedicated to transportation by 0.475 percent. Rhode Island tied its tax to inflation. Wyoming raised the total tax on gasoline and diesel by 10 cents, from 14 cents per gallon to 24 cents per gallon.
Whether or not Congress makes changes to the federal gas tax, this issue is sure to ignite in more statehouses this year.
By the Numbers
Gulf War Veterans, Workin’ It
Very few World War II and Korean War veterans are still in the labor force, and the majority of the Vietnam-era veterans are at or nearing retirement age. But Gulf War veterans—divided between the first Persian Gulf conflict from 1990 to 2000 and the second, from 2001 to the present—are in their prime working years. Here’s a look at some statistics on the second group, whose average age is 31.
U.S. military veterans of all wars
Number who served in Gulf War II
(2001 to present)
Portion of male vets employed full time, compared to 75 percent for male civilians
Portion of these male vets who are not working because they are in school
Portion of these vets who are police officers, security guards or firefighters, the largest occupation group. For civilian men, it’s 3 percent.
Portion of Gulf War II vets in management jobs.
Sources: U.S. Census Bureau report, “The Employment Status and Occupations of Gulf War-Era Veterans,” November 2014; Infoplease.com
More Elderly Go Hungry
The percentage of older Americans facing the threat of hunger is rising, according to a 2014 report by the National Foundation to End Senior Hunger. Of Americans age 60 and older, 15.3 percent, or 9.3 million, are “food insecure,” without safe, affordable food available to them at all times.
Seniors who don’t eat well, or don’t eat enough, are 60 percent more likely to develop depression, 53 percent more likely to report heart attacks, 40 percent more likely to report congestive heart failure and 200 percent more likely to develop asthma, according to the foundation. Food insecure seniors also experience decreased resistance to infections and lengthened hospital stays.
For older Americans with chronic diseases, food can make a huge difference in their health. In general, seniors who eat well respond better to medication, maintain and gain strength faster and have higher rates of recovering and maintaining their health. Often, patients are required to take food with their medications. Access to proper nutrition is paramount in the prevention of various illnesses and disabilities, including diabetes, hypertension and heart and lung problems.
Hunger-related health care costs for all Americans total $130.5 billion each year, according to researchers at Brandeis University and the Center for American Progress who compiled statistics from numerous sources.
Seniors often don’t eat well because they lack enough money to pay for all their expenses. In 2012, the median income for men 65 and over was $27,612 and $16,040 for women 65 and over, according to the U.S. Department of Health and Human Services Administration on Aging. Because of the high cost of some medications, it is not uncommon for seniors to have to choose between medications or food.
The U.S. Department of Agriculture offers older Americans several nutrition assistance programs, but lawmakers can help as well. NCSL’s Hunger Partnership suggests the following actions for lawmakers interested in addressing hunger in their senior communities.
- Raise awareness of the problem through media events, district newsletters, websites or resolutions.
- Bring community organizations, food banks, and seniors together to evaluate existing programs.
- Visit local senior centers or food banks to learn more about programs and see how they operate.
- Lead a meeting with state agencies or governors to reach vulnerable seniors in the community.
- Work with local hospitals and health care entities to promote programs aimed at improving seniors’ health.
NCSL’s Hunger Partnership
The NCSL Foundation for State Legislatures launched the Hunger Partnership in 2010 to raise the visibility of hunger in America and improve the availability of healthy food for hungry families. Composed of legislators, legislative staff and public and private-sector partners, the Hunger Partnership has connected lawmakers to several local efforts working in collaboration with farmers’ markets, senior centers, early child care programs, and schools and summer meal programs to find solutions to hunger. Under the leadership of Georgia Senator Renee Unterman (R) and Pennsylvania Representative Dwight Evans (D), the partnership also has advanced program accountability, food waste recovery and federal food assistance programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children. After its successful launch, The Hunger Partnership has left the umbrella of the Foundation and continues its work as an independent project at NCSL.
Energy Financing From the Future
Winter and summer extremes are especially harsh on many Americans—and their energy bills. Increasing energy costs put a crimp on economic development for industry, business and households. Since saving energy can help Americans save money and promote job growth, legislatures are exploring ways to improve energy efficiency and put money in consumers’ pockets.
Improving energy efficiency offers a range of benefits to consumers and states, including lower energy bills, lower air emissions, a more productive economy, and the avoided capital costs of having to build new power plants.
In legislative sessions last year, lawmakers in several states enacted more than 100 energy efficiency-related bills, including legislation in 14 states—California, Colorado, Connecticut, Delaware, Florida, Kentucky, Maryland, Minnesota, Mississippi, North Carolina, New Hampshire, New Mexico, Oregon and Vermont—to help finance energy efficient building upgrades and technology enhancements.
The goal of energy efficiency financing is to remove the main barrier to upgrading older buildings: the high up-front costs. The method allows building owners to “pay” for improvements with the future savings promised from the upgrades. Typically, these projects pay for themselves within two to 20 years. This kind of financing may also help to lower loan default rates as well as increase property values.
There is, however, more demand for upgrading the energy efficiency of buildings than the current available financing can supply. State legislatures are helping bridge this gap by seeking other avenues to increase financing opportunities. Some of the common tools they are using or considering using include bonds, loans, energy savings performance contracting and state energy banks.
Several state policies in 2014 focused on increasing consumers’ access to financing while protecting them, along with financial institutions and the state, from financing that is too risky or not cost-effective.
Other state innovations include legislation that:
- Permits small or rural communities in Colorado to combine their energy efficiency projects in order to attract more private financing.
- Allows electric and gas utility customers in Minnesota to pay back the cost of privately financed loans for energy efficiency improvements through their monthly utility bills—called on-bill repayment.
- Streamlines “Property Assessed Clean Energy” financing loans for property owners with existing mortgages in California, New Hampshire and Oregon, allowing owners to pay for the cost of energy efficiency improvements over several years through assessments on their property.