Thursday, July 18, 2002
Taft urges Feds to OK increases in spending for highway projects
By Malia Rulon
The Associated Press
WASHINGTON - Ohio Gov. Bob Taft urged Congress on Tuesday to increase highway spending for states and to stop using ethanol tax dollars to pay down the national debt.
Mr. Taft told a congressional panel that Ohio and other large states are experiencing a severe drop-off in federal h
ighway funding because of an increase in ethanol users.
Ethanol is taxed at 13.1 cents a gallon, compared to 18.4 cents a gallon for gasoline. Most of that revenue goes into the Highway Trust Fund, which is used to maintain the nation's roads and bridges. However, 2.5 cents of the tax collected on each gallon of ethanol is transferred for deficit reduction.
From 1998 to 2001, the highw
ay fund has lost $6.01 billion because of lower revenues from ethanol and the general fund transfer, according to the General Accounting Office, the investigative arm of Congress.
GAO projections show that over the next decade, the highway fund will lose $13.7 billion because of lower revenues from ethanol and $6.9 billion being diverting the revenue for deficit relief.
Mr. Taft said t
he losses for Ohio are greater than for most other states because ethanol use in Ohio is about 40 percent, compared to 11 percent nationally. Under the current highway funding formula, large states like Ohio get a percentage of the total amount of fuel revenue they collect.
An increasing number of Ohio motorists who use ethanol translates into a $150 million loss each year, Mr. Taft said.
As the use of ethanol and other alternative fuels increase, Congress will see such losses growing across the country, Mr. Taft told the House Transportation and Infrastructure Committee.
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