Senate Rejects Plan to Reduce Federal Gas Tax

By Kevin McCarty
April 17, 2000

Senate Majority Leader Trent Lott (MS) lost his bid to reduce the federal excise tax when the Senate voted 43-56, falling short by 17 votes on a procedural vote, known as ‘cloture,’ that would have ended Senate debate and allowed full Senate consideration of legislation to repeal 4.3 cents per gallon in fuel taxes.

Lott’s legislation, S. 2285, calls for the immediate repeal of 4.3 cents-per-gallon federal fuel tax, replacing any lost revenues in the short term with a portion of the federal budget surplus. The legislation would also suspend all remaining federal gas taxes if gas prices rise to $2.00 per gallon between now and December 31.

His plan has drawn strong opposition from Senators and Representatives of both parties, particularly Congressional transportation leaders, who have worked over the past several years to dedicate fuel tax revenues to transportation infrastructure investment. The nation’s state and local governmental organizations has also conveyed their opposition to the legislation.

Repeal of the 4.3 cents per gallon, which is now deposited into the Highway/Transit Trust Fund and dispensed to states and localities as spending under the nation’s TEA-21 law, destabilizes the “guaranteed” spending features of the 1998 surface transportation law. Specifically, revenues from the 4.3 cents per gallon increment translate into $7.2 billion annually in transportation spending (i.e. $5.8 billion for highways and $1.4 billion for transit). This tax cut would also affect funding provided for aviation investment under AIR-21.

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