By Eric Kulisch
The U.S. Congress will eventually be forced to follow the European model and raise highway fuel taxes to tackle the debt rather than dedicating revenue to transportation programs, Noël Perry, an economist who focuses on the freight sector, said during an industry conference this month.
Transportation advocates have openly worried that Congress might abolish the Highway Trust Fund if it isn’t fixed so that enough revenue from gas and diesel fuel taxes is collected to meet grant obligations to states rather than dipping into the general fund to keep the account solvent. Without a dedicated account, fuel taxes would go into the government’s big tax pot and transportation programs would compete with other government services for annual appropriations.
Perry, speaking on a panel at the Council of Supply Chain Management Professionals’ annual confab in Philadelphia, suggested that Congress would go one better and raise fuel taxes for the express purpose of paying off the debt because it is the easiest source of revenue to collect.
A surface transportation reauthorization bill has been stalled in Congress for more than two years in part because lawmakers and the administration don’t want to raise taxes to pay for infrastructure maintenance and upgrades while the economy is still struggling.
Europeans pay $3 to $4 per gallon for fuel and the money goes to fund all aspects of government, not just transportation.
“It is highly probable that we are going to pay higher fuel taxes and the money will go for other stuff,” said Perry, who runs his own consulting practice, Transport Fundamentals, and is a contributor to forecasting firm FTR Associates.
During a panel discussion at the Council of Supply Chain Management Professionals conference, Oct. 2-5, someone from the audience asked about availability of refrigerated and flatbed trucks in today’s market.
Moderator Thom Albrecht, transportation analyst for BB&T Capital Markets, interceded and said: “We were supposed to have a reefer user. [Pause]. . . Let me rephrase that. I think he’s out for a hair follicle test.
“We were supposed to have a shipper that buys a lot of temperature-controlled services who had some last minute changes.”
Hair follicle testing is a new technique that is more accurate than urine testing at detecting drug use among truck drivers.