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Peters: Cut reliance on gas tax to fix roads
date: May 6, 2008
SOURCE: Detroit News
In Detroit, secretary of transportation stops short of joining debate to suspend levy in summer.
By: Christine Tierney
U.S. Transportation Secretary Mary Peters said the government should reduce its reliance on fuel taxes to maintain roads, bridges and other structures but declined to weigh into an election debate over whether those taxes should be suspended for the summer.
"As family budgets strain under the burden of record gasoline prices, it is increasingly clear that fuel taxes are not only ineffective but also wildly unpopular," Peters said in a speech Monday to the Detroit Economic Club. "Increasing dependence on gas taxes to fund infrastructure makes zero sense when Detroit and other automakers are working so hard to make more efficient cars every year."
However, she added, fuel taxes are currently the main source of funding for federal transportation-related spending.
Still, the government's role should be to encourage new investment and innovation in transportation, she said.
Fuel taxes have become a hot issue in the presidential election, with Sens. John McCain and Hillary Clinton favoring a suspension of fuel taxes during the summer when fuel demand peaks.
Sen. Barack Obama says the proposal would offer consumers little relief while reducing funding for important transportation projects. The tax holiday would cost the government $11 billion.
President Bush told "ABC News" on Monday he hadn't taken a position on suspending the 18.4-cent per-gallon federal gas tax over the summer. "I told them we'd look at it, but, you know, this is a problem that's been a while in making and it's going to be a while that we solve it," Bush said.
Detroit's automakers have not taken any public position on the proposals for a summer tax holiday. Some auto executives say it's unlikely to take place, and Chrysler LLC executives have said tax relief wouldn't be a long-term solution.
Gas prices hovered near record levels Monday, averaging $3.61 per gallon for regular unleaded.
In New York, oil prices closed at an all-time high of $119.97 a barrel after earlier hitting $120.36.
In her speech, Peters criticized "bridges to nowhere" and other unnecessary projects that divert resources from what should be the government's transportation priorities: maintaining the interstate highway system, encouraging transportation in urban centers, and increasing safety.
"We have taken ownership of safety, and we have made measurable progress in reducing traffic fatalities," she said. "Here in Michigan, the number of deaths is down 25 percent compared to 10 years ago, and severe injuries have been cut in half."
She praised automakers for adding safety features to their vehicles and for their efforts to boost fuel-efficiency.
With the new mileage regulations passed recently, "we are accomplishing important national goals -- cutting fuel consumption by nearly 55 billion gallons, reducing tailpipe emissions, and saving America's drivers more than $100 billion in fuel costs over the lifetime of the cars and light trucks covered by the new rule," she said.
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