Bill would hike gas tax to pay for roads
A bipartisan group of House members has filed legislation to hike the federal gas tax and index it to inflation to pay for a new transportation bill.
The measure would increase the gas tax, which has been 18.4 cents per gallon since 1993, to index it to inflation in January 2016 and set it to rise again in three years unless Congress comes up with a new way to pay for federal transportation projects.
The sponsors of the measure said Thursday that it would generate $27.5 billion that can be used to pay for nearly two years' worth of transportation projects and give lawmakers time to find a new infrastructure funding source to replace the gas tax.
The federal government’s transportation funding measure is scheduled to expire on May 31. Lawmakers in both parties have expressed a desire to prevent an interruption in the road and transit funding, but they have been struggling to come up with a way to pay for an extension.
The gas tax has been traditional source of transportation funding since its inception in the 1930s. The tax has not been increased since 1993, however, and its buying power has been sapped by improvements in car fuel efficiency in recent years.
The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion annually at its current rate.
The lawmakers who are sponsoring the proposal said their measure would give members more time to debate new transportation funding proposals that have been suggested, which include relying on taxes that would be collected by imposing new levies on corporate profits that are stored overseas.
“The Bridge to Sustainable Infrastructure Act allows for the consideration of all viable options so that Congress can get serious about finding a long-term, sustainable solution for the Highway Trust Fund,” they said. “It is our sincere hope that our colleagues on both sides of the aisle will support this important legislation so that the burden of our failing infrastructure isn’t passed on to the next generation.”
The Department of Transportation has said that its Highway Trust Fund will run out of money in July if Congress does not reach a deal on an extension.
Lawmakers have turned to other areas of the federal budget to close the $16 billion gap in infrastructure funding in recent years, but transportation advocates have complained the temporary patches are making it too difficult for state and local government to plan long-term construction projects.
If the gas tax has been indexed to inflation in 1993, it would be about 30 cents-per-gallon now.
Transportation advocates have pushed to permanently increase the gas tax to that level to provide a recurring source of funding for future rounds of infrastructure spending instead of another of a one-time cash infusion. But lawmakers have been reluctant to ask drivers to pay more at the pump to help finance construction projects.
Other proposals that have gained more support include switching to a wholesale tax on barrels of oil and using revenue from taxing overseas corporate profits to pay for transportation projects. Republicans and Democrats have voice support for the corporate tax proposal, which is known as repatriation, but they been unable to reach an agreement on whether the levies should be voluntary or mandatory.
Transportation advocates applauded the House members for introducing legislation to prevent an interruption in the federal government’s infrastructure funding.
“This legislation would ensure more than a temporary patch by laying out a systematic approach to identify predictable funding for the trust fund over the next 10 years,” AAA President Rob Darbelnet said in letter supporting the legislation to index the gas tax.
“Indexing the user fee to inflation is an overdue action that will be easy to implement and administer,” Darbelnet continued. “This will generate the revenue required to maintain the immediate solvency of the Highway Trust Fund, while providing Congress with time to identity a true long-term solution by September 2016. This legislation also provides the impetus for Congress to enact a long-term plan by establishing a bipartisan, bicameral commission for identifying sustainable funding going forward, including a ‘trigger’ for a gas tax increase if no action is taken.”
The lawmakers said their measure would require Congress to create “a bipartisan, bicameral Transportation Commission no later than September 1, 2015” that would be responsible for offering recommendations for boosting U.S. infrastructure funding.
The measure would automatically increase the gas tax again in three years if lawmakers have not adopted the panel’s recommendations by then.
