August 2014

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From the Chairman August 2014 | Construction Equipment Distribution | www.cedmag.com | 5 President & CEO - BRIAN MCGUIRE Associated Equipment Distributors Oak Brook, Ill. Executive Vice President & COO ROBERT HENDERSON Associated Equipment Distributors Oak Brook, Ill. OFFICERS Chairman - TIM WATTERS Hoffman Equipment Co., Piscataway, N.J. Vice Chairman - DON SHILLING General Equipment & Supplies, Inc. Fargo, N.D. Sr. Vice President - WHIT PERRYMAN Vermeer Equipment of Texas, Inc. Irving, Texas Vice President - RICK VAN EXAN Toromont Industries Ltd. Concord, Ont., Canada Vice President - WES STOWERS Stowers Machinery Corp. Knoxville, Tenn. Vice President of Finance MICHAEL D. BRENNAN Brandeis Machinery & Supply Co., Louisville, Ky. Past Chairman - MIKE QUIRK Wagner Equipment Co. Aurora, Colo. AT-LARGE DIRECTORS TODD BACHMAN Florida Coast Equipment, Inc. Boynton Beach, Fla. RON BARLET Bejac Corp. Placentia, Calif. DENNIS J. HELLER Stephenson Equipment Inc. Harrisburg, Pa. LARRY R. MILLER Kelbe Bros. Equipment Co. Inc. Butler, Wis. MITCH NEVINS Four Seasons Equipment, Inc. Houston, Texas MIKE ROONEY Thompson Tractor Co., Inc. Tarrant, Ala. REGIONAL DIRECTORS RYAN GREENAWALT Midwest Reg. Alta Equipment Co. Wixom, Mich. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd. Burnaby, B.C. PATRICK W. MCCONNELL West Reg. Clyde/West, Inc. Portland, Ore. CHRISTOPHER PALMER Northeast Reg. Wood's CRW Corp. Williston, Vt. GILES POULSON Rocky Mountain Reg. Faris Machinery Co. Commerce City, Colo. JAY RODES, Southeast Reg. Wilson Equipment Co. Lexington, Ky. RICK VAN EXAN Eastern Canada Reg. Toromont Industries Ltd. Concord, Ont. GARY D. VAUGHN South Central Reg. OCT Equipment, Inc. Oklahoma City, Okla. I was in Washington, D.C., late June to participate in a press conference urging members of Congress to find money for our Highway Trust Fund, which could be bank- rupt in August. These are always interesting experiences, though I am usually left disap- pointed in and frustrated by our legislative process. This latest trip was no exception as I recognized once again that our elected repre- sentatives (Senate and House) are generally cowards, and very few of them have the guts to say or do what is right for our country! This most recent press conference took place in a Senate hearing room, and was called by Sen. Barbara Boxer of California (Democrat), who chairs the Senate committee that oversees transportation issues. The intent of the press conference was to drum up support from both parties for a bill that has just passed Boxer's committee to raise funding for the Trust Fund. Created by Congress in 1956, the Highway Trust Fund has ensured a steady and reliable pool of money to pay for infrastructure improve- ments and repairs. The Trust Fund gets its money from a gasoline tax (currently 18 cents/ gallon), which by law is to be used exclusively for highway construction and maintenance (this was later expanded to include mass transit). The tax, which was last increased in 1993, is not indexed for inflation, so it actually generates only about 11 cents/gallon in 2014 dollars (inflation adjusted from 1993). Nor does the current law take into account that cars and trucks drive (and consume roads) more miles per each gallon of gas today than when Bill Clinton and the Republicans found a way to compromise on this critical legislative issue some 20 years ago. So both parties generally agree that this is a vital piece of legislation, and that for the good of the nation it is imperative that we not allow our Highway Trust Fund to go broke. And though few have the courage to say so, both parties know that the only practical way to replenish the Trust Fund is to increase the gas tax. But how much does it need to be increased? If only to restore the effective purchase power of the tax back to what it was when last increased in 1993, the tax needs to be increased to 30 cents/gallon! But even at 30 cents, the effective 'collec- tion rate' is less than in 1993 because cars and trucks get better mileage today than in '93 and because more and more vehicles don't even run on gasoline (think battery and natural gas powered vehicles). According to Pew Research, average fuel economy of cars and trucks in '93 was about 25 MPG and is today about 29 MPG – so to maintain the relative 'collection rate' of the tax today versus 1993 requires at least an additional 16 percent (35 cents/gallon) plus some amount, let's say 5 cents, to account for battery- powered vehicles that don't contribute at all (long term, an excise tax should be charged at the sale of non-gas consuming cars to be earmarked back into the Trust Fund to ensure that all consumers of our roads contribute to their upkeep and improvement). So that's it, in order to restore our Trust Fund back to a level of collection on a par with where it was in 1993, we need to increase our gasoline tax to 40 cents/gallon. Now let's see if any of our senators or representatives has the guts to say this – but I think we know the answer to that! In fact, the Republican ranking member of the committee chickened out of the press confer- ence at the last moment – just more of the same chickenshit behavior that we have come to expect from our elected representatives! TIM WATTERS (timwatters@hoffmanequip.com) is president of Hoffman Equipment in Piscataway, N.J. The Easiest – and Most Cost- Our Gas Tax Should Be 40 Cents a Gallon But do elected officials have the guts to do it? BY TIM WATTERS Editor's Note: The following editorial contains language some readers may consider offensive.

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