Possible Tax Hike Could Increase Gas Prices By 40 Cents
Congress Considers Large Federal Gasoline Tax Increase
9:37 AM, Jun 3, 2009
Gas prices, already on the rise, could jump significantly if Congress approves a large tax increase to help pay for the Federal Gasoline Tax Fund.The increase could be as much as 40 cents a gallon. In exchange for the big increase, motorists would have a better chance of driving on better maintained state or federal highways, 6News' Rick Hightower reported.Prices shot above $2.75 a gallon in central Indiana Tuesday. The last thing drivers wanted to hear was that a gas tax increase could send the price much higher, from the current 18 cents a gallon to 58 cents."With the way the economy is right now, to raise taxes again is going to set things back to where it was before," said driver Craig Lewandowski. "The fact that gas prices went down helped out a lot of people.""I don't like the prices now. I'm a college student. I have no money anyway," said Kara Prewitt. "Gas prices going up is never a good thing."The fund that pays for highway construction would go broke in August unless Congress infuses about $7 billion needed to keep current projects going.If the fund goes without, it would be bad news for Indiana, which got close to $1 billion from it last year."We're in a better position because of Major Moves, but we rely on federal funds to help out with a lot of those projects," said Bruce Childs, of the Indiana Department of Transportation. "So you can't discount the importance of having the Federal Highway Trust Fund money."A decline in driving drove the fund down. If the tax is increased and people switch to more fuel-efficient cars, it could keep even more people closer to home, cutting the fund further.Sen. Richard Lugar said he wants the deficit to be covered through alternative means, without a tax increase.