Possible Tax Hike Could Increase Gas Prices By 40 Cents

Congress Considers Large Federal Gasoline Tax Increase

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.