Gasoline prices are about $4 a gallon, and people are currently devoting uncomfortably large sums to keep their tanks filled. However, the proposal by Gov. Michelle Lujan Grisham and other governors to suspend the federal gas tax is a terrible way to address the problem.
First, the United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. The federal tax was last raised in 1993 and is not indexed to inflation. This means that, in real terms, gas tax revenue is about half of what it was when enacted. This is why our federal highways are in such poor condition in many places. Suspending the gas tax would worsen this already bad situation.
Second, as University of New Mexico associate professor of finance Reilly White pointed out to KOB 4, there is nothing to force gas stations to pass the savings through to the consumer.
Finally, high gas prices are a signal to all consumers to modify their behavior: drive less, reduce speeds – you use 1/4 less fuel at 55 mph than you do at 75 mph – turn the engine off when waiting to pick people up, accelerate and brake more gently and buy cars that get better mileage.
If you want to help low-income car owners who spend the largest percentage of their incomes on fuel, send them a check. That way they can spend it on higher priorities if they can find other ways to reduce their fuel consumption.
We could incentivize the insurance companies to offer drivers “per mile” car insurance, which would pay people to drive less, reducing the demand for and the price of gasoline.
Finally, we could diversify our urban transportation system, making it feasible for people to get around Albuquerque via active – walking and biking – and shared – buses, carpools and trains – transportation modes that use little or no fuel. This is what the Netherlands aka Holland did after the oil shortage of the 1970s, and now one-third of people get to work by means other than cars, and 80% of kids get to school on bikes.
There are other benefits to designing cities to accommodate non-car users: Someone using active or shared modes contributes much less to climate change than car users, enjoys better health, and doesn’t contribute to traffic congestion or local air pollution.
In addition to the above, Dutch pedestrian traffic crash fatality rates are 1/30 that of the United States. Notably, this did not come at the expense of drivers: Dutch driver/passenger crash fatality rates are one-third of the United States, and Holland was consistently rated the best place to drive when Waze did international surveys.
By all means, let’s alleviate the pain at the pump we are all experiencing. But let’s do it in a way that delivers help to those who need it most and makes progress on other issues that originate from our over-dependence on cars.
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