However, Here in Milwaukee, we cut a lot of our bus service and are fighting plans for a city based light rail system and the a potential commuter rail link to Chicago. We are either really rich and can afford the $4+ gas, or we have elected the dumbest politicians imaginable, who still live in the 1950s.
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Except when it isn't. That's because when gas prices go up, gas purchases go down. And while the price of a gallon of gas may soar, the tax levied on it remains the same. Less gas sold equals less tax revenue for states and municipalities.
So far this fiscal year, gas consumption is down about 3 percent in Indiana, costing the state about $12 million, state Budget Director Chris Ruhl said. That's money that would have helped fund road construction and repair.
Even as national politicians debate suspending the federal gas tax to give drivers a break, many state officials are swinging in the opposition direction. Florida, North Carolina, West Virginia, Kentucky and Maine have raised their gas taxes this year, while Georgia Gov. Sonny Perdue vetoed a 2.9-cent increase in the state's 18.5 cent-a-gallon tax. Meanwhile, transportation planners in Ohio last month proposed raising the gas tax by up to 40 cents more per gallon.
Transit systems shell out at the pump
Worse, increased ridership means higher costs for transit systems. That's because it takes more fuel to move more passengers, and transit systems aren't getting a break at the pump.
Wichita Transit in Kansas, which has seen a 22 percent increase in ridership, has raised its weekly fuel purchase to 8,000 gallons. One recent delivery cost 30 cents a gallon more than it had the week before, officials said.
That caused the bus service to ask the city council for $210,000 from a reserve fund, money it said was needed to keep buses on the street until July.
"The fuel prices have gone up so dramatically and drastically that even the dramatic increase in ridership is not making up as far as our fuel debt is concerned and our ability to purchase fuel," said Michael Vinson, the system's acting director.
It all adds up to a conundrum for government officials — high fuel prices send passengers to mass transit but drive down tax revenue and strain fuel budgets.
"With gas at this level, rail and public transit has got to be a bigger and bigger part of our future," Virginia Gov. Tim Kaine said.
Answers aren't expected any time soon, Minnesota Gov. Tim Pawlenty said. He added:
"We need a dramatically different energy policy for our country, and that's not going to happen overnight."
With Tom Costello of NBC News
© 2008
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