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Boxer says transportation projects should be financed by wholesale oil tax

The federal government should replace its 18.4 cents-per-gallon tax on gas with a fee paid by oil wholesalers. That’s the opinion put forth Wednesday by Sen. Barbara Boxer, D-Calif., chairwoman of the Senate committee that oversees infrastructure projects.

Boxer, according to The Hill’s Transportation report, said getting rid of the federal gas tax in lieu of a wholesale oil tax increase would help close the gap on a $20 billion shortfall in transportation spending.

During a hearing of the Senate Environment and Public Works Committee, Boxer said she was “leaning toward” the idea to “… do away with the per-gallon fee at the pump and replace it with this sales fee as they’ve done in Virginia and Maryland.”

Beginning in the 1930s, transportation projects have been paid for by collection of a tax on each gallon of gas (or diesel) purchased by drivers. At present this brings in about $35 a year.

The amount per year in the most recent surface transportation bill is $54 billion, which is estimated to be barely enough for maintaining current infrastructure, much less any improvements.

Boxer claims there is bipartisan agreement that Congress needs to find a new funding source for transportation and said lawmakers could avoid taking money for transportation fixes from other areas of the federal budget by adopting her plan, which she said would be a “sustainable funding source for transportation.”

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