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Republican Presidential Candidate John McCain, today proposed a suspension of federal motor fuel user fees from Memorial Day to Labor Day. He offered no plan to replace the $10 billion that would be lost in fuel tax revenues to the Highway Trust Fund if his proposal were to be put in place. This would mean a loss of $200 million in federal funds for Tennessee.

At a time when our country is staring at a recession and our transportation infrastructure faces serious funding shortfalls at both the federal and state level, the last thing we need is a reduction in the amount of funding for the program. Instead of taking $10 billion out of the program, we ought to be putting $10 billion into the program. Doing so would create hundreds of thousands of jobs, reduce congestion, improve safety on our highways and provide a true stimulus for the economy

It is projected that the Highway Account of the federal Highway Trust Fund will already fall some $3.2 billion short of the amount needed in FY 09 to fund the highway program at the level authorized in SAFETEA-LU if Congress does not enact some type of fix this year. If not fixed, this negative balance of $3.2 billion will result in as much as a $12 billion reduction in the federal highway program in FY 09, due to the nature of the highway program spend out rate. With this reduction, Tennessee would face a nearly $240 million cutback in funds in the next federal fiscal year, beginning October 1. Tennessee receives approximately $860 million in federal transportation funds, which half of TDOTs total budget.

In case you missed it, speaking at Carnegie Mellon University in Pittsburgh, PA, today, McCain said: “I propose that the federal government suspend all taxes on gasoline now paid by the American people — from Memorial Day to Labor Day of this year. The effect will be an immediate economic stimulus — taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up.

Over the same period, our government should suspend the purchase of oil for the Strategic Petroleum Reserve, which has also contributed to the rising price of oil. This measure, combined with the summer-long “gas-tax holiday,” will bring a timely reduction in the price of gasoline. And because the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy.

[tags]John McCain, Highway Trust Fund, FHWA, NAPA, Lehman-Roberts Co.[/tags]