Bi-Partisan Plan the Raise the Gas Tax to fund Highway Trust Fund
June 18, 2014 | Tags:
Sens. Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) on Wednesday unveiled the first bipartisan Senate proposal to raise the gas tax, an idea most lawmakers have avoided.
The Murphy-Corker plan would raise the gas tax by 12 cents over the next two years, raising $164 billion over the next decade and covering the shortfall in the Highway Trust Fund.
It would index the gas tax to inflation, pegging it to the Consumer Price Index, to avoid future shortfalls.
The lawmakers say it is time for Congress to pay for popular transportation programs instead of using budgetary gimmicks to hide their cost and pushing debt into the future.
“We’re losing hundreds of millions of dollars in economic productivity because we’re failing to invest in our nation’s roadway and rails,” said Murphy. “You’re not going to find, virtually, any member of Congress who is proposing to spend less money on infrastructure over the next ten years.”
The question, they argue, is whether that spending will be covered by borrowing money from China or finding a way to pay for it now.
Congress last raised the gas tax in 1993.
Corker would avoid violating Americans for Tax Reform’s Taxpayer Protection Pledge by pairing the gas tax hike with other tax-relief legislation, such as a proposal to renew certain expired tax provisions indefinitely.
Corker said he vetted his proposal with the anti-tax group.
“We’ve done some work and had some phone conversations with them,” he said.
He said making permanent popular tax credits, such as the research and development tax credit, the state and local sales tax deduction, the teacher tax credit and the deduction for parking at mass transit sites, would provide $189 billion in tax relief over the next decade.
“I don’t think there is anybody who disputes making those permanent, by the way,” Corker said.
Heritage Action for America, a conservative advocacy group, immediately signaled its leeriness of the plan.
“No worries… let’s just propose a $164 billion tax increase,” Dan Holler, the spokesman for Heritage Action, tweeted.
Murphy argued his and Corker’s proposal has the support of labor unions and the U.S. Chamber of Commerce.
Corker dismissed a competing proposal by House Republicans to replenish the Highway Trust Fund by cutting the U.S. Postal Service’s Saturday delivery service.
“Only in Washington would you take money from insolvent enterprise to fund another insolvent enterprise,” he said.
The Postal Service reported a $1.9 billion loss in the second quarter of this year.
“I think it’s a gimmick,” said Murphy of the House plan.
The Highway Trust Fund, which funds transportation projects across the country, is projected to run out of money this summer, putting more than 600,000 jobs at risk.
The fund is currently funded by an 18 cents-a-gallon tax on gasoline and a 22 cents-a-gallon tax on diesel.
“Most Americans want to see us to continue to improve our infrastructure,” said Corker.
Transportation advocates, who have been pushing for a gas-tax increase for more than a year, applauded the announcement of Corker and Murphy’s bipartisan proposal.
“Our nation’s key infrastructure fund is rushing toward insolvency,” Transportation for America Director James Corless said in a statement.
“Proposed short-term patches using accounting gimmicks have been all but shot down in both houses,” Corless continued. “Sens. Murphy and Corker are showing real leadership – as well as concern for their constituents’ jobs and safety – by championing a long-term solution that recognizes the gravity of the situation and addresses it head-on.”
Advocates for increasing tolling to help for transportation projects also cheered the Corker-Murphy proposal, calling it “gutsy” to propose increasing the taxes that are paid by drivers in an election year.
“We applaud Sens. Murphy and Corker for their gutsy proposal to increase the federal gasoline and diesel taxes by six cents in each of the next two years to keep the federal Highway Trust Fund from going broke,” International Bridge, Tunnel and Turnpike Association Executive Director Patrick Jones said.
“We also applaud the proposal to index the gas tax to inflation to ensure that it maintains its purchasing power into the future,” he added.
Jones said polls have shown that voters will support an increase in the gas tax if the money is used to pay for needed transportation improvements.
“While there is not much stomach for increasing fuel taxes in an election year, motorists have said in numerous polls that they would be willing to pay higher fees to support road infrastructure if they know where the money is going,” he said. “That means spending it on road construction and repairs.”
The tolling advocacy group said increasing the gas tax would still not permanently solve the problems with transportation funding in the U.S,however.
“In the long term, however, the fuel tax is not a sustainable source of funding for highway infrastructure,” Jones said. “This was the conclusion of the two Congressional commissions on revenue and finance created several years ago under SAFETEA-LU and of numerous other studies.”
Jones pitched tolling as a more viable funding replacement in the long run, noting that the Obama administration has already supported lifting a long-term ban on adding toll booths to existing highway lanes.
“Tolling is a proven, effective tool that already funds and finances more than 5,000 miles of roads, bridges and tunnels in 35 states,” he said. “It will take a mix of funding solutions to keep our roads and bridges safe and reliable. All options should be on the table so that states can choose the funding methods that work best for them.”
—Keith Laing contributed to this report, which was updated at 12:36 p.m.
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