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New federal regulations will boost the costs of gas — again | Brunell
By Don C. Brunell
For the Reporter
Imagine that you see a swimmer floundering in the water. You call the rescue squad and then you toss the swimmer a concrete block. Does that make sense? Of course not, but that's what's happening in Washington, D.C.
President Obama recently proposed spending more than $20 billion on roads, bridges, highways and ports across the nation as a way to stimulate economic growth. Traditionally, the bulk of that money has come from federal fuel taxes.
But at the same time, the Environmental Protection Agency announced new mileage standards and air quality rules that could add as much as 9 cents a gallon to the cost of gasoline.
While one program aims to save the floundering economy, the other tosses it a concrete block. It's as if the left hand doesn't know what the right hand is doing — or worse, doesn't care.
With our teetering economy, it's vital that Congress and the Obama administration carefully weigh any benefit of new regulations against their impact.
For example, fuel efficiency standards began during the 1973 oil shortage, but with new technology, America doesn't have an oil shortage. In fact, the U.S. may soon outpace Saudi Arabia as a global oil producer.
And while fuel-efficient cars are a good thing, is this the best time to double-down on already strict regulations while turning a blind eye to the economic consequences? Washington families are already paying $75 to gas up the minivan. Higher gas prices that create no substantive benefit will just bring more hardship.
Costly new regulations and higher taxes don't exist in a vacuum — they slow economic growth.
In the fourth quarter of 2012, the U.S. economy grew at an annual rate of 0.4 percent. Until the economy resumes a healthy growth rate of 3 percent per year, the Obama administration should suspend all new non-critical regulations that slow economic growth, just as former Gov. Chris Gregoire did a couple of years ago in Washington state.
State lawmakers have a role to play, as well.
Washington legislators want to increase our state's gas tax 10 cents a gallon to pay for maintenance and highway improvements. If that happens, Washington drivers will pay 65.9 cents per gallon in state and federal gas taxes — third highest in the nation behind California and Hawaii.
There is no question that we need additional money to repair roads, bridges and highways. But how the gas tax package is structured — and how the money is spent — will determine if it harms or helps our economy.
First, state lawmakers should recognize that the gas tax alone can't provide the funds we need for our highway system. There are more cars and trucks on the roads today, but those fuel-efficient vehicles use less fuel and consequently generate less gas tax revenue.
Ironically, while state policy encourages the use of electric cars through taxpayer-funded "free" charging stations and "free" parking, those vehicles pay nothing to maintain the highways. As part of any gas tax package, lawmakers should require owners of hybrid and electric vehicles to share the cost of maintaining our roads and highways.
Secondly, the first priority for any new gas tax revenue should be to repair and maintain existing roads and strengthen bridges.
Third, any new projects must focus on substantive, cost-effective benefits. Taxpayers need to know what they are getting for their money.
Fourth, we should streamline the regulations covering transportation projects and reduce permitting costs to make highway construction projects faster and more cost-efficient.
In short, we should make sure that regulators and lawmakers are helping our floundering economic recovery and not tossing it a concrete block.
Don Brunell is the president of the Association of Washington Business. For more about AWB, visit www.awb.org.