A New Gas Tax?

by Pierre G. Villere

We all know there have repeated efforts for decades now to increase the federal gas tax, which has stood at 18.4 cents since 1993, almost 30 years without an increase.

This is ridiculous. The fact is that in most states, toll roads are major transportation arteries for commuters, and typical automobile owners are charged hundreds of dollars per year to access the roads in their state. And an increase in the gas tax is eminently fair; it is a user tax that is charged by how much you drive rather than a fixed fee, and therefore favors those whose driving habits are limited. It also fairly charges those who heavily utilize interstate highways, turnpikes, and parkways, and are therefore mostly responsible for creating the ongoing maintenance all streets and roads require. Of course, a peek into the crystal ball tells us that electric vehicles will represent some portion of the total automobile fleet within a few years, so some fair way to tax these vehicles that don’t consume gasoline must be considered as well.

Efforts to raise the gas tax have been underway for decades now, initiated by various groups at different times with a vested interest in the construction and maintenance of our nation’s infrastructure, but to no avail. Well recently, a bipartisan group of 58 Congressional lawmakers who call themselves the Problem Solvers Caucus issued a comprehensive report on infrastructure, which proposes indexing gas and diesel taxes to inflation, highway construction costs, fuel-economy standards, or some combination of the three. It lays out several possible fee increases, including a vehicle-miles traveled tax that would collect revenue from electric vehicles.

While the bipartisan group doesn’t detail specific funding levels, it does call for federal investments in rail, water infrastructure and broadband. Closing the gap between taxes owed and taxes paid and creating a national infrastructure bank are among other revenue ideas the group lays out. The report comes against the backdrop of what appears to be two very different views of our infrastructure needs. President Biden seeks to advance his $2.3 trillion infrastructure plan on Capitol Hill, while a group of Senate Republicans have outlined a much more modest $568 billion proposal. Their alternative comes with a criticism of Biden’s plan, which GOP lawmakers have argued is too broad. At press time, discussions regarding a compromise had not even begun.

We are in desperate need of a robust infrastructure bill, and an increase in the gas tax is clearly a sensible way to fund part of it. Let’s support the Problem Solvers Caucus and their initiative.

Martin Ozinga III accepts the NRMCA’s William B. Allen Award in 2016.

On a personal note … Marty Ozinga III, chairman of Illinois-based Ozinga Bros. Inc., was a giant. Known to the industry as “Marty,” he passed away on April 26th at the age of 71. Much has been written in the last few weeks about his life in obituaries and remembrances easily found on the internet, but the impact he had on our industry will be everlasting. By now, anyone who has read about him knows he started working for his father at age 15, and became general manager of the ready mixed concrete business at age 23. Under his watch, the company grew from 45 mixer trucks to over 500, and he pioneered the use of technology throughout his company. In particular, he created a state-of-the-art central dispatch operation that has been visited by many colleagues around the industry who wanted to learn from his technology leadership.

In 2016, I lobbied the National Ready Mixed Concrete Association to award Marty the William B. Allen Award that year, in recognition of his lifetime of achievement and leadership in our industry. Just before the awards ceremony, I walked over to congratulate him; he winked and said “I heard you had something to do with this.”

We will miss him forever.

Pierre G. Villere serves as president and senior managing partner of Allen-Villere Partners, an investment banking firm with a national practice in the construction materials industry that specializes in mergers & acquisitions. He has a career spanning almost five decades, and volunteers his time to educating the industry as a regular columnist in publications and through presentations at numerous industry events. Contact Pierre via email at [email protected]. Follow him on Twitter – @allenvillere.