Congressman Proposes 15-Cent Gas Tax Hike
The legislation -- which would undoubtedly face an uphill battle -- would increase the federal gas tax by 15 cents over three years.
Rep. Earl Blumenauer (D-Ore.) introduced a bill this week that would increase the federal gas tax by 15 cents over three years, but even he doesn't think the legislation has a good chance of becoming law.
Blumenauer's proposed the legislation to address the growing shortfall of the Highway Trust Fund, the federal account funded by gas taxes that distributes billions of dollars to states for transportation projects.
According to federal projections, in FY 201, the feds won't have enough money in its accounts to pay states what they're owed for transportation work. To fix the situation, CBO says, the feds would need to raise the gas tax, find another source of funding, or essentially eliminate federal transportation spending via a 92 percent cut.
The feds have faced a chronic shortfall of transportation funding, in part because the federal gas tax hasn't been raised in 20 years. The tax doesn't rise with inflation, so over time, its purchasing power has dramatically declined. Meanwhile, increased fuel efficiency of vehicles means Americans pay fewer taxes, per mile, than they have in the past.
Blumenauer's plan would shore up federal transportation funds by raising the current 18.4 cent-per-gallon federal gas tax to 33.4 cents. It would also add a 15-cent hike to the diesel tax. According to Blumenauer, the plan would generation around $170 billion in extra funding over 10 years.
Congress has less than a year to figure out how to address the situation: the current highway and transit bill expires Oct. 1, 2014.
At an event at the Capitol Wednesday to promote the legislation, a litany of stakeholders who often have different political perspectives -- the U.S. Chamber of Commerce and labor groups, AAA and transit advocates -- joined together to echo the call for the tax hike.
Blumenauer's legislation highlights a dichotomy that has underscored the discussion about transportation funding in recent years. Almost universally, lawmakers tout the need for investment in the country's infrastructure. Yet many of them -- especially at the federal level -- have been silent about how to actually pay for it. Incidentally, Blumenauer's bill doesn't have any co-sponsors.
Congressional Republicans -- many of whom have enthusiastically embraced pledges to avoid tax hikes -- have historically viewed the concept as a non-starter. But Democrats haven't been enthusiastic about gas tax hikes either and transportation advocates, including Blumenauer, have criticized President Obama for failing to outline any substantive plan to increase transportation funding.
When Congress passed a highway bill in 2012, it failed to address the long-term questions of how to pay for infrastructure, and the idea of a gas tax hike was never seriously considered. "(I)t isn't popular," Blumenauer said. "Everybody wants somebody else to do it, to take the first step, to figure out what to do."
Janet Kavinoky, who leads transportation efforts at the U.S. Chamber of Commerce, said there are few options to address the situation other than a gas tax hike. Cuts alone -- short of eliminating transportation spending altogether -- won't be enough, and Congress already implemented reforms in last year's highway bill that were seen as a way to make existing spending more efficient. "There's no free lunch, there's no creative option, and there's no avoiding this revenue questions," Kavinoky said.
Meanwhile, Kathleen Bower, AAA's vice president of public affairs, says the issue is so important that her organization is supporting a gas tax hike even though it's not popular with most of its members. Mary Phillips, senior vice president for legislative affairs at the American Trucking Association, says her organization supports the hike -- even though it could result in higher fuel costs for its members.
Meanwhile, a slew of federal boards, as well as many advocates and academics, have also recommended raising the gas tax. The Simpson-Bowles commission recommended a 15-cent-per-gallon hike, and two other federal commissions tasked with examining transportation funding also recommended a boost. "It's been studied to death," Blumenauer said.
Interestingly, organizations representing states -- the entities that actually spend federal transportation money -- were absent from Wednesday's event. But states have taken a role in increasing their own transportation funding in the absent of Congressional action. In 2013 alone, Virginia, Maryland, Vermont, Wyoming, Pennsylvania and Massachusetts all enacted major reforms that will increase fees and taxes in order to pay for infrastructure.
Still, Blumenauer's legislation will almost certainly face resistance -- if Congressional leaders pay attention to it at all. The legislation has no cosponsors, but Blumenauer is hoping to at least get a hearing in the House Ways & Means Committee or the Senate Finance Committee. He also concedes that "the odds are not strong" the legislation passes this year, but he's hoping to at least bring attention to the issue. He hopes a gas tax hike could be incorporated into a larger budget deal crafted by Congressional negotiators.
The last time Washington increased the gas tax in 1993, the move came as part of a deficit reduction package, so the new bill could potentially have traction on that front.
Blumenauer compared his legislation to a colonoscopy, arguing that it's unpleasant but necessary. "Maybe you need to do it, but there's not a lot of people (who) want to talk about it at cocktail parties," Blumenauer said. "But it's important."