For informational/historical purposes only.

June 26, 2002

The Honorable

U.S. House of Representatives

Washington, D.C. 22515

Dear Congressman______:

As you begin the important work of reconciling differences in H.R. 4 and S. 517, I write to urge your support of the provision in the Senate-passed legislation that would redirect the 2.5 cents of the federal ethanol tax that presently goes to the General Fund into the Highway Trust Fund.

The Senate language is important to a growing number of states, like Ohio, with high ethanol-blended fuel consumption. The Senate passed energy bill contains a provision that would redirect 2.5 cents of the federal ethanol tax from the General Fund into the Highway Trust Fund. This transfer would increase Ohios annual highway funding return by an estimated $50 million. The redirection of these funds would be an important first step in addressing the current ethanol tax inequities.

Ohio faces a very unique situation with respect to ethanol fuel consumption. Even though an ethanol production plant does not exist in Ohio, our motorists annually consume record levels of this fuel. Nearly 40 percent of the gasoline consumed in our state contains an ethanol additive. This has had a dramatic consequence on our federal transportation funding return.

Currently ethanol blended fuels are taxed at 13 cents a gallon, a 5.4 cent reduction from the 18.4 cent federal gasoline tax. Further, 2.5 cents of the tax collected is redirected from the Highway Trust Fund to the General Fund. Overall, the federal tax break for ethanol and the redirection of a portion of the tax reduces Ohios transportation funding return by $160 million per year. Ohio is being "penalized" for using a product that is promoted and subsidized by federal policy.

Thank you for your consideration.

Sincerely,

 

Bob Taft,
Governor