Community Comment:

Daniels has good plan for fuel tax

Gov. Mitch Daniels had a rather upbeat meeting recently with President-elect Barack Obama at the National Governors Conference in Philadelphia.

The meeting provided the governor with an opportunity to make a suggestion that could address a long-simmering problem that has outraged informed citizens in numerous states regarding the dispensation of funds for road building projects from the Federal Highway Trust Fund.

Since 1956, when the trust fund was created, the traditional formula used to redistribute federal fuel tax dollars returned to the various states has created a huge disparity. Currently, Indiana receives only some 92 cents for every fuel tax dollar collected at the pump.

Over the several decades, this 8-cent disparity amounts to literally hundreds of millions of Hoosier taxpayer dollars having been sent to other states notably New York, New Jersey, California and other places where the money is used not only to build roads and bridges but to subsidize enormous municipal mass-transit systems.

The federal tax on motor fuels raised some $28.6 billion in fiscal 2006.

Federal highway trust money became a campaign issue in April when John McCain, then the Republican presidential candidate, suggested a "gas tax holiday" to cushion the blow to consumers from $4.50 gas prices during the peak driving season last summer. Obama endorsed no such holiday.

But there may be another reason Daniels is making this suggestion at this time. Three years ago, several members of Congress proposed a 4-cent-per-gallon increase in the gas tax to fund a $375 billion highway bill. They backed off when President Bush threatened to veto any highway language that would include a tax increase. The final version of the bill came in at $286 billion with no tax increase.

As recently as last year, the Congressional Budget Office predicted the fund would run an estimated $1.7 billion deficit at the end of fiscal 2009. Unexpectedly, the shortfall has risen to $3.2 billion by the end of this year and could grow to more than $10 billion or more by the end of fiscal 2010.

Daniels' suggestion would have the Obama administration forgo using the traditional highway trust fund formula and instead target federal infrastructure dollars to those states that have projects in the pipeline deemed "shovel ready" for construction.

Under the governor's "Major Moves" initiative, Indiana has several of these projects earmarked for completion, with funding being the only major impediment.

Daniels also is asking Obama to consider waiving certain federal regulatory requirements regarding some of these projects. This would have the effect of possibly moving up the start date of some of these road projects, putting more people to work in shorter time.

Pennsylvania Gov. Ed Rendell, president of the National Governors Association, has asked Daniels to formalize his suggestion in the form of a letter to the Obama transition team, but there is much more that could be done right here in Indiana.

For instance, what if all 10 members of the Indiana congressional delegation, along with Sens. Richard Lugar and Evan Bayh, were to put their partisan differences aside and write letters to the Obama transition office endorsing Daniels' idea?

Beyond that, it would be great if members of the leadership of both houses of the Indiana General Assembly could independently consider Sense of the House and Sense of the Senate resolutions endorsing Daniels' suggestions and convey that message to the Obama administration after the inauguration.

This would demonstrate strong bipartisan support within Indiana for this timely suggestion. Many of their respective constituents will obviously benefit from these funds if the roads and bridges are ever constructed, so there would be plenty of political credit for later.

Likewise, there is no reason local elected officials some of whom receive federal highway dollars could not get in the act.

In election cycle after election cycle in Indiana, candidates have decried the vast disparity that exists under the federal highway trust fund formula and how shortchanged we have been here in Indiana.

This would be a particularly auspicious occasion for state, federal and local lawmakers to speak with a united, bipartisan voice endorsing an idea which could right an age-old wrong not of their making.

They would be doing their respective constituents not to mention Daniels a big favor.

David Coker of Evansville is a free-lance writer.