Truckers' lament: it's getting worse - gas tax increase - Trucking Industry

Just when they thought it couldn't get any worse, it did. Motor carriers throughout New Mexico are not just grappling with the 4.3 cent per gallon federal tax increase on gasoline that went into effect Oct. 1.

That, they say, was just the beginning of a real whipping.

Now they're also dealing with a 6 cent gas tax increase from the New Mexico Legislature and the costs of responding to the Environmental Protection Agency's enforcement of the Clean Air Act.

Without the approximately eight to 10 cent increase in fuel costs from the Clean Air Act, fuel prices have gone up 15.3 percent per gallon in just three years.

The increases are intended for deficit reduction, and some of the state taxes are going to education programs.

On Oct. 1, high sulfur fuel became illegal for use in power tractors. Fleets that use old diesel fuel in highway vehicles could face fines of up to $25,000 a day for each violation.

At least for a short time, the EPA will be enforcing the act with discretion.

What it means to motor carriers is higher costs -- pure and simple.

What it means to the rest of the public is higher costs for the products the trucks deliver.

Right now, however, many companies are having to eat the costs while trying to raise their rates.

"We were supposed to get a 4.5 cent tax, and instead we get a 25 cent tax," says Bob Clover, owner of Clover Inc., and officer of the New Mexico Motor Carriers Association.

The low sulfur fuel requirements jack up prices for the trucks and could cause technical problems for some of the older rigs out there.

Many wonder just what the government is trying to accomplish.

"I can't see where they can show where it's legitimate," Clover says. "We just got back from Washington and we asked our delegates to look into this North American Free Trade Agreement program as well to see what they can make more even."

The only thing many companies can do to respond to the recent barrage of taxes and costs is increase rates, Clover says.

But that's not an easy task.

"You never get rates up in line with the taxes because the average consumer just can't see this," says Clover. "We're just surviving, and we're keeping our heads above water, but I don't know how long we can do that."

Clover says the consumer needs to understand that when taxes on transportation go up, it's going to cost them more money in the long-run.

"We can't raise our rates fast enough to compensate for this. I just asked my customers for a nickel increase and they agreed, then I said it's almost time again for another one," he says.

Motor carriers throughout the state are seeking legislative help for some sign of relief, and U.S. Rep. Steve Schiff recently co-sponsored a bill that would remove the federal tax increase on fuel.

"Because of the lack of public transportation and vast open spaces of our state, New Mexicans will pay more than most other Americans," Schiff says. "Most importantly, the increase is unjustified because it isn't going to do what it was intended for -- bring about deficit reduction."

By the year 2000, the costs of cleaner fuel are estimated to be more than a 13 cents per gallon increase. Diesel fuel prices could go up by 11 cents this fall, and truckers could end up paying 25 percent of the tax.

Some responses the industry has considered include various ways to raise rates, including a surcharge on regulated trucking rates, a special tariff authority allowing truckers to file fuel increases suspension or freeing up Zone of Rate Freedom.

Another challenge to motor carriers in the state is the logbook rules, which stipulate that drivers can only drive up to 70 hours in an eight-day period.

Unions have objected to changing the rules, but motor carriers lose out on use of equipment that could be transporting goods.

"What you drove eight days ago constitutes what you can drive tomorrow," Clover says, adding it could be changed without forcing drivers to work more hours.

"It would give me a chance to use that equipment more."

As far as problems with the use of the new fuel, some companies are having problems with failure rates of fuel pumps, which can cost several hundred dollars each to replace.

Combined with the waiting periods to get licensed, the state and federal bureaucracy, the likely coming of NAFTA and more taxes, smaller operators are struggling to compete.

"Something has to change," says Clover.

"It can't go on like this."

E. David Grenham is a Belen newsman and a freelance writer based in Socorro.

Ready for Action -- or Lip Service?

Maybe truckers throughout the Southeast have been right all along.

Executives for the Santa Teresa crossing in Dona Ana County may talk about being ready for action -- but there have been some questionable results.

When Zaragosa International Bridge between El Paso and Ciudad Juarez was temporarily closed by Mexican farmers protesting their government's agricultural policies, one option was for truckers to head to Santa Teresa.

A lot of them did, but wound up stalled again when a computer fouled up at the border crossing station and paperwork mounted.

Instead of being welcomed at the Santa Teresa crossing, a lot of truckers said they faced just the opposite response -- out-and-out rudeness, according to some.

Most of the truckers contend they won't make the trip again to Santa Teresa because of the distance and the continued wait.

The market will call the shots and if New Mexico isn't ready for new business, that business will endure the long wait at Zaragosa or detour to El Paso-Juarez.

Zaragosa is the easternmost of three border crossing over the Rio Grande and the only bridge that can handle trucks over 20 tons.

At Santa Teresa, there is no need for a bridge; just rumble in on the paved highway provided on the Mexican side of the border.

But truckers have to put up with inadequate infrastructure on the U.S. side -- an incomplete highway -- until they reach I-10.

Again, New Mexico enhances its reputation for posturing, not performing, at Santa Teresa.

COPYRIGHT 1993 The New Mexico Business Journal
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