Two lawmakers sitting on the tax-writing committees in both chambers are aggressively pushing for a federal gas tax increase to help sustain the Federal Highway Trust Fund (HTF), which gets its revenue from gasoline taxes. Both say the need is urgent as the trust fund is set to run out of cash by August (TAXDAY, 2014/04/17, C.3).
Sen. Tom Carper, D-Del., who chairs the Transportation and Infrastructure Subcommittee of the Senate Environment and Public Works Committee, which is responsible for writing a new bill to renew surface transportation projects, supports raising the 18.4-cent federal gas tax three or four cents a year for up to four years, then linking increases in the tax to increases in inflation. He also plans to discuss with members of the committee other ways to come up with the funds.
“I think it’s one of those things where people know we have to summon the political courage to do something,” Carper said recently in an interview with Gannet News Service. “Ultimately, I may come out of those meetings and say, “There is no appetite for doing anything until after the election.” Maybe that will be the case. I hope not.”
Carper has pointed out that, while the gas tax – which funds transportation programs – has not changed since 1993, the price of steel, concrete, asphalt, and labor has gone up. And, Americans are driving more fuel-efficient vehicles, including hybrids, so they are using less gas and generating less revenue to fund transportation programs. Carper has not, however, proposed any formal legislation to address the issue.
In the House, Rep. Earl Blumenauer, D-Ore., proposed legislation in December 2013, the Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Bill (HR 3636), to increase the gas tax by 15 cents over three years, then index it to inflation. He also plans to take his case to the House Ways and Means Committee which is expected soon to hold a hearing on transportation financing.
Because Congress did not index the gas tax to inflation, it has not kept up with spending since it was last raised in 1992. “By increasing the gas tax by 15 cents, which is what has been recommended by multiple bipartisan budget commissions, my legislation basically makes the same change that would have occurred had we tied the gas tax to inflation back in the early 1990s,” said Blumenauer about his bill.
Blumenauer’s bill would increase the rate of tax on gasoline other than aviation gasoline to 33.3 cents per gallon after 2015 and before 2025, diesel fuel or kerosene to 39.3 cents per gallon after 2015 and before 2025, and diesel-water fuel emulsion. It would delay the termination of the increased rates from the end of fiscal year 2016 to December 31, 2024. The measure also would impose a floor stocks tax on rate increases for gasoline, diesel fuel and kerosene (other than aviation-grade kerosene), subject to specified exemptions for exempt uses and low-volume producers.
Blumenauer’s bill has support from organizations across the political spectrum. It is supported by the Chamber of Commerce, the American Public Transit Association, Transportation for America, the AAA, the American Road and Transportation Builders Association, the American Trucking Association, and several labor organizations. Other lawmakers have also expressed their concern over the rapidly approaching deadline for funding the highway trust fund. Senate Budget Committee Chairman Patty Murray, D-Wash., said figures recently released by the Transportation Department highlight the urgency of the situation and must be taken seriously by lawmakers (TAXDAY, 2014/04/17, C.3). In the House, Rep. Bill Schuster, R-Pa., has held several hearings of the House Transportation Committee to determine a path forward.