Congress once again failed to adopt a long-term extension of highway funding before heading out of town for a month, but at least it managed to adopt a short-term extension.
As Senior Editor Mark Solomon reported, the bill will fund highway and mass-transit projects through May 2015. Following its favorite game of brinksmanship, Congress passed the bill just in time to prevent the Highway Trust Fund from running dry. The bill included a transfer of $10.8 billion into the fund from general revenues, paying for it with a sort of budgetary accounting trick that would probably make your local CPA blanch.
Senators had pressed for a shorter extension in hopes of pushing through a multiyear reauthorization, a plan supported by the American Trucking Associations. However, the prospects for any long-term bill suffer from one major impediment: Paying for the maintenance and expansion of the nation's highways and bridges will take a lot more money than current gasoline and diesel taxes can raise. This Congress, and in all likelihood the one to follow in January, is deathly allergic to tax increases of any kind—even one supported by some of the most conservative and tax-averse business interests in the land.
The 18.4-cent tax on a gallon of gasoline and the 22.4-cent tax on diesel have not changed since 1993. Vast improvements in fuel efficiency mean that most drivers are paying less tax per mile than they were at that time. And inflation has taken a major bite out of spending. The result is a substantial shortfall in the funds states need to keep highways safe and productive. And it will only get worse as a growing economy puts more stress on the roads. This is not simply a transportation issue or a tax issue. It is an economic issue, one that if not addressed could harm any business that ships or receives goods—that is, every part of our economy. In the long term, we need to adopt a different mechanism than the per-gallon tax on fuel. But in the short term, it's past time for members of Congress to step up and raise the fuel tax.
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On a wholly different topic, I don't want to sign off without congratulating old friend Michael Regan, founder of TranzAct Technologies, who will receive the Council of Supply Chain Management Professionals (CSCMP) Distinguished Service Award at the group's annual conference in San Antonio. I cannot think of anyone who deserves it more. Mike is not only a shrewd and inventive businessman, he is also a passionate advocate for the logistics profession. I've known Mike for more than a quarter of a century and continue to learn from him. As Rick Blasgen, CSCMP's president and CEO, said in announcing the award, "His vast and significant contributions have left an indelible mark on our industry." Congratulations, Mr. Regan.
Gartner, Inc.
