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Congress extends federal gas tax

Pump it up: Senior Brittany Binder fills up her car with gasoline at a local station. Binder, like others, is concerned with the renewal status of the government-instated gas tax. OMEED MALEKMARZBAN / PHOTO

Every one and one-half weeks, senior Brittany Binder empties her wallet to fill up her car’s gas tank. Since her car gets 15 to 16 miles per gallon, for a full tank of gas Binder spends about $65, which she earns from working at a café at Life Time Fitness, a fitness and health center. She will also occasionally receive help from her parents.

A portion of Binder’s hefty bill comes from the 18.4 cents per gallon federal gas tax, which then goes to states for road construction and repair. On Sept. 30, the end of the government’s fiscal year, the federal gas tax was set to expire, and Congress had the choice to either extend or repeal it. According to multiple sources, Congress extended the federal gas tax until March 31, 2012.

Binder said a repeal of the federal gas tax would have made her life easier, and she would not have to worry about conserving fuel as much.

“I understand there are some roads that are really bad, but I can’t believe that the gas prices are ridiculous. We’re making the same amount of money, but the gas prices just keep jumping and jumping day by day,” Binder said.

Economics teacher Michelle Foutz said if Congress repealed the federal gas tax, the decision has made a greater impact on those with a lower disposable income, such as students. The percentage of the income they pay for gas is much higher than the percentage for people who make more money. Although it may mean fewer jobs for construction workers, Foutz said there are advantages to repealing the federal gas tax.

“By paying less in tax, then you have more disposable income,” Foutz said. “Then you can buy more of other goods and services that are produced by other workers. If there is more money in people’s pockets, and people are spending money on other things, then there’s more production in those goods and services, which means more workers in those industries and less unemployment in those industries.”

States may choose to raise the state gas tax if Congress repealed the federal gas tax. According to the American Petroleum Institute, Indiana’s combined gas tax in July 2011 was already 58.1 cents per gallon, 9.2 cents higher than the national average.

Besides a state gas tax increase, there are alternative ways to pay for road construction and repairs. According to Foutz, Indiana has money from selling the Indiana Toll Road at the beginning of Gov. Mitch Daniel’s administration, and the state uses this money for road projects throughout Indiana.

Since Congress extended the federal gas tax, Americans will continue to pay the 18.4 cents per gallon fee unless Congress raises or lowers it. Other factors may also cause gas prices to rise. Foutz said higher prices are a concern. It impacts purchasing power, especially for gas, which everyone uses on a daily basis. People then have less money to spend on other goods and services.

Binder said, “I guess I’ll have to work harder and rely more on my parents, because if the taxes keep going up or stay the same, I won’t have money.”

According to Ron Farrand, Director of Facilities and Transportation, public schools pay for an excise tax, which depends on the type of fuel and other factors, instead of the federal gas tax.  Public schools end up paying 50 cents below pump price. If Congress repealed the federal gas tax and states stepped in to raise the state gas tax, public schools would not have to pay for the new taxes unless states made them required. Farrand said if more students start riding the bus due to high gas prices, the amount of new riders will determine how to adjust accordingly. Right now CHS has about 56 assigned buses. Although buses appear the same on the outside, there are three different seating capacities: 75, 81 and 84. The worst case scenario is that CHS will have to add a new bus.

“Through all this where the gas prices have gone up, I don’t know that we have really seen a significant impact as far as more student riders. Surely there’s some. There’s no doubt, but look at the parking lot where everybody parks and (say) it didn’t get any less full than four years ago,” Farrand said.

Binder said she chooses to drive to school every day. She also drives to work three times a week and whenever she does activities with her friends. She said she is not too happy with the current gas prices, but she will follow the rules and pay the gas tax because she can’t fight against it anyway.

“I think we should care and pay attention (to the gas tax) because honestly it deals with our lives every day. It relates to us, especially now when times are hard,” Binder said. “Parents may not be able to help you, so it really does depend on you to find your own money to pay for your own gas.”

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