Official: Gas tax drop bad news for local highways
Economist Bernard Weinstein, associate director of SMU's Maguire Energy Institute, talks about the effect the drop in gasoline prices is having on highway funding.
By Seth Nidever
Low gas prices at the pump may be celebrated by drivers, but those bargain prices are “decimating” the funding stream for improvements to Kings County’s state highways, according to a local transportation planning official.Proceeds from the gasoline excise tax — which goes up or down depending on the price — are plummeting due to low gas prices.
Another gasoline tax — this one a fixed per-gallon charge — is also declining due to more fuel-efficient cars, hybrids and the push for all-electric vehicles.
None of this is good for Kings’ prospects for significant highway improvements, according to Terri King, executive director of the Kings County Association of Governments. . .
The low gas prices that are cutting into gasoline excise tax revenues aren’t likely to go up anytime soon, according Bernard Weinstein, a gas price expert at Southern Methodist University in Texas.
Normally, oil supply would contract to match slumping worldwide demand. Weinstein said geopolitical factors are complicating the picture.
He said Saudi Arabia is keeping its production high (and losing money in the process) in order to maintain low prices. The goal is to hurt its No. 1 rival, Iran.
Iran’s government gets much of its cash from oil revenue. So does Russia, Iran’s main ally.
“It’s political agendas that are being played out,” Weinstein said.
Weinstein thinks the Organization of Oil Exporting Countries — an organization heavily influenced by the Saudis — will eventually stop what Weinstein called the “insanity” of the current situation. He’s just not sure when “It could go on for a few more years,” he said.