In This Issue

	W.V. Lawmakers to look at Gas Tax in Special Session
	‘Cash for Clunkers’ = Cash for Big New Pickups
	Auto Execs call for Gas Tax to Stimulate Electric Vehicle Sales
	Texas Drivers may see Higher Fuel Taxes
	Texas Tax Collections $1B Short
	Southwest Ranks Third for On-Time Arrivals
	Senators call for Federal Probe on Metro Safety, Blocked Inspectors
	Economy Stalls Mississippi Toll Road
	Indiana Group Voluntarily Pays Extra for Gas

W.V. Lawmakers to look at Gas Tax in Special Session

BECKLEY, W. Va. – Adjustments to the built-in escalator on the gasoline tax in West Virginia is expected to be on the table when lawmakers return Nov. 17 for a special session, according to House Finance Committee Chairman Harry Keith White. New funding sources for state highway construction amid the dwindling gas tax revenues will be among nine items on the agenda next week. Two recent freezes imposed on the tax have reportedly cost the state an estimated $142 million in potential highway funding.

“It will be a tough year for any new highway projects,” said White, D-Mingo. “But as bad as things sound, I think we will do what we can to come up with enough revenue to continue to move forward.” Legislative leaders are expected to pass legislation that will impose both a floor and a ceiling on the gas tax escalator so it goes 1.5 cents in either direction. The escalator is computed based on the average retail sale of gasoline from July through October.

Gov. Joe Manchin says if oil prices go up as predicted, he wants the tax structured so motorists are not hit too hard, but he also wants to work with the Department of Transportation so the tax is done “in a prudent and sensible way.” The governor echoed White and Senate Finance Chairman Walt Helmick’s call for a new, dedicated funding source highways and bridges.

‘Cash for Clunkers’ = Cash for Big New Pickups

WASHINGTON - The $3 billion ‘cash for clunkers’ campaign by the Obama administration should instead by called “cash for gas-guzzling pickup trucks,” according to an Associated Press analysis of the data. The AP reports says that the most common buyers in the 8,200 deals traded in their old Ford 150 pickup trucks for new Ford 150 pickups. Fuel economy on the newer models remains below 20 mpg, and just 1 to 3 mpg better than the clunkers.

The AP found that large Dodge and Chevrolet pickup trucks were not far behind Ford on the clunker trade-ins, and were replaced by big new Rams and Silverados.

Of the more than 95,000 new vehicles, approximately one in seven got under 20 mpg. The AP analysis comprised data based on 677,081 trade-ins processed by the government through Oct. 16. The data analyzed by the AP found the overall average fuel economy for clunker trade-ins was 15.8 mpg combined rating, while the average for new vehicles purchased was 24.9 mpg.

The most common truck-for-truck or truck-for-SUV sales totaled at least $911 million. The $562,500 spent by the government in rebates for cars and trucks that got the same or worse mileage as the trade-ins was an apparent violation of the program’s requirements, which aimed to boost fuel economy, reduce pollution, trim demand for imported oil, and take gas-guzzlers off the road. The government said it is investigating those reports and said in some cases they were probably entered incorrectly by dealers or based on outdated fuel economy figures.

The irony of this program is that it was intended to replace low fuel-efficient vehicles with vehicles that get better mileage. While some improvement in overall mileage ratings occurred, the trading of old F150’s for new violates what we all thought was the intent of the program. This illustrates how hard it is for government to legislate smart or reasonable decision-making upon the public.

Another example of how government failed in a similar endeavor happened about eight years ago, when the Arizona legislature offered a rebate for up to half the cost of an alternative fueled vehicle. Estimates of the unexpected rebates ranged from $160 to 200 million in, forcing a special legislative session just to plug the budgetary hole. It was reported that many who bought these alternative fueled vehicles never actually ran them on natural gas-- just used their normal fuel tanks anyway and pocketed the 50% rebate. It is hard for big government to be smart and see all the nuances of these programs. TW

Auto Execs call for Gas Tax to Stimulate Electric Vehicle Sales

WASHINGTON – Auto industry executives at the Reuters Auto Summit in Detroit last week say the best way to encourage consumer adoption of electric vehicles is to boost the federal gas tax. Their comments echo an October study by Lux Research that reported the sales of electric cars and plug-in hybrids would be weak over the next ten years unless gas prices triple.“Unless gas is $3.50 or $4 a gallon, consumers are not going to want to buy those cars,” said Jerry York, a former GM board member and an adviser to billionaire investor Kirk Kerkorian.

Auto execs participating in the event pointed to last summer; that when gas prices reached $4 per gallon, more drivers converted to flex fuel vehicles. Now that gas prices have dropped – the average cost per gallon was $2.66 in October – “Americans are once again buying fuel-hungry sport utility vehicles and other large cars,” reports Reuters.

“The U.S. allows the price of gasoline to go back and forth across this line where the consumers don’t care about fuel efficiency and where consumer do care about fuel efficiency,” said AutoNation Inc. CEO Mike Jackson at the summit.

“In the United States, we’re afraid to touch the fuel price,” Tim Leuliette, chief executive of Dura Automotive, told Reuters. “We’ve got to continue to raise taxes in the United What you have to do is do it in a manner that is slow enough and predictable enough that vehicle selection and choices by people over the cycle can by made in a logical way.”

Texas Drivers may see Higher Fuel Taxes

EL PASO, Texas – New highways in Texas could be paid for by an increase to the 20-cent-per-gallon state fuel tax in a proposal by members of the Texas Senate Transportation Committee. At a meeting this week in El Paso, legislators said money to build new roads does not exist. The state transportation department currently receives 15 cents of the 20-cent state fuel tax, a level unchanged since 1991.

“We are in a critical position in this state where we are growing and will need more roads,” said the committee chairman, state Sen. John Carona, a Dallas Republican. “But we have no money to build them and no more debt that we can issue.”

The lawmakers said it is still too early to give precise figures on how much the tax needs to be raised. State Sen. Eliot Shapleigh, D-El Paso, suggested another possibility would be to allow municipal and county governments the option of levying a temporary fuel tax for new highway projects in their areas.

Texas Tax Collections $1B Short

AUSTIN – Sales tax and natural gas tax collections in Texas have fallen more than $1 billion from the projections in the 2009 fiscal year, according to state reports, sparking concerns about what financial woes lay ahead for the state.

“I think it tells us that the economy was softer than expected (when projections were outlined) in January, and tax revenues were lower than expected … and if it weren’t for federal stimulus money, we would have been in a lot of trouble,” said Dick Lavine, of the Center for Public Policy Priorities, who analyzed the state comptroller’s report. Lavine noted that federal funding was nearly $2.9 billion more than projected, for a total of $30.9 billion in federal funds for fiscal year 2009. Federal funding was 17.6 percent higher than the previous year, largely due to federal stimulus funds and money received as a result of Hurricane Ike.

The comptroller’s spokesperson called the report “a snapshot” because it does not include the current, two-year $182 billion state government budget, which includes some $12 billion in stimulus funding.

Texas lawmakers expect to be challenged in developing the budget in the 2011 legislative session, which is primarily why they did not use the $9 billion rainy day fund, which is funded by oil and gas tax revenues, and also affected by lower natural gas tax collections. “My first thought is that we are fortunate to have ended the 2009 session with a rainy day fund, and my second thought is that 2011 is going to be a challenging year,” said Rep. Mike Villarreal, D-San Antonio, House Appropriations Committee member.

Southwest Ranks Third for On-Time Arrivals

Southwest Airlines is ranked number three for on-time arrivals in September, according to data from the U.S. Department of Transportation, which ranks the top 19 airlines with the best on-time arrival rates. At a grade of 89.08 percent, Dallas-based Southwest was barely behind second-place Alaska, at 89.97 percent. Hawaiian Airlines had the highest rating, with 94.11 percent of its flights on-time during September.

JetBlue Airways, Continental Airlines and Hawaiian had the lowest rates of cancelled flights.

According to information filed with the Bureau of Transportation Statistics (BTS), a part of DOT’s Research and Innovative Technology Administration (RITA), the 19 carriers reporting on-time performance recorded an overall on-time arrival rate of 86.2 percent in September, higher than both September 2008’s 84.9 percent and August 2009’s 79.7 percent.

This story is interesting because Hawaiian is # 1, Alaska is # 2 and Southwest is third. If Hawaiian isn’t number one something is wrong; the average flight is about 30 minutes long, no snow, and connections are minimal. If you have ever traveled to Hawaii, you did not hear the pilot announce you were tenth-in-line to take off at Kahalui Airport. Never happens. I don’t think the pilot even slowed down from taxiway to runway the last time I made that flight: they do have it easy. Alaska Airlines flying out of the northwest gets more respect from me, while Southwest, continues to outperform the competition. TW

Senators call for Federal Probe on Metro Safety, Blocked Inspectors

WASHINGTON, D.C. - U.S. Senators are calling for an investigation into possible safety lapses at Metro, the transit system serving the Washington, D.C., Maryland and Virginia communities. Public hearings have been scheduled for Feb. 23 and 24 by the National Transportation Safety Board, regarding the transit system’s June 22 crash in D.C., which killed nine and injured dozens more.

Federal investigators plan to focus on the “adequacy” of Metro’s effort to address safety, and whether transit systems were sufficiently overseen. Also, a House subcommittee has called for a Dec. 8 hearing into the federal role in transit safety. Transportation Secretary Ray LaHood and Federal Transit Administrator Peter Rogoff will testify on the issue before the House Subcommittee on Highways and Transit.

The Washington Post has reported repeated instances in which the Tri-State Oversight Committee, the regional body that oversees Metro safety, was unsuccessful in obtaining information from Metro regarding near-collisions and other safety breakdowns. The Post also reported that subway officials had barred independent monitors from live tracks. Metro board Chairman Jim Graham said Monday that the agency’s safety chief was “out of order” when she denied monitor access. Graham vowed to make sure they did have access. “We’re going to fix this,” he said.

Sen. Robert Menendez (D-N.J.), who chairs a transportation subcommittee, said: “This is a case study on how the current patchwork of state safety organizations are failing our nation’s commuters. The Banking Committee is pursuing stronger federal transit safety oversight, and I will be chairing a hearing on this very topic in the coming weeks. There needs to be a change before more people are killed in another preventable rail disaster.”

Economy Stalls Mississippi Toll Road

Mississippi - A new Airport Parkway toll road in Mississippi proposed to be built by a private investor has been put on hold as a result of the economy, officials said. A short-list comprised of three Spanish-based conglomerates was scheduled to submit bids by mid-September, but a winning proposal did not emerge, according to state department of transportation officials.

The proposed 12-mile Airport Parkway would connect I-55 in Jackson to Mississippi Route 475 in Rankin County, in order to relieve congestion near the Jackson-Evers International Airport. The state had solicited bids to build, operate and maintain the roadway in exchange for 50 years of toll revenue. The Mississippi Department of Transportation applied for a federal grant under TIFIA (the Transportation Infrastructure Finance and Innovation Act) as part of the financing package.

MDOT Executive Director Larry L. “Butch” Brown blames the economy for the delay. “The private sector needs to demonstrate that it can deliver meaningful savings versus a traditional MDOT financing and delivery plan,” Brown said in a statement. “For example, unless private sector bidders can genuinely deliver construction cost savings, operational savings, or financial savings, the numbers just don’t work. In this economy, revenue projections are under pressure and investment grade ratings for the project’s senior debt are difficult to obtain,” Brown said.

Indiana Group Voluntarily Pays Extra for Gas

GOSHEN, Ind. – Members of Goshen, Indiana’s first Voluntary Gas Tax Group tax themselves 50 cents or more on every gallon of gas they purchase. The group says the idea they are trying to convey is that what we are charged for gasoline is not the true cost of gasoline. Karl Shelly, who coordinates the group’s efforts, records the gallons of gas he buys on his refrigerator and taxes himself accordingly.

“If you look at the price of gas on an international scale, we are paying a third or a half of what most people pay,” Shelly says. “If you add in the environmental costs and the foreign policy costs, it would be much higher than what we are paying now.”

The group’s 25 members have raised more than $4,500 this year. The group gathers three times a year to pool the money, and decide where they will give it; the money is donated to local causes that benefit the environment and the unemployed. In July, the group donated the money to the city forestry department, where it was used to buy 10 trees that will be planted in north Goshen next week. “Studies have shown trees not only beautify neighborhoods but they mitigate air pollution and carbon buildup in our atmosphere,” Shelly said.