Bold Proposal Offers Short-Term Fix to Transportation Funding

Gas tax revenue just ain't what it used to be. Image: Flikr user Images_of_Money.

Gas tax revenue just ain’t what it used to be. Image: Flikr user Images_of_Money.

The “infrastructure deficit” is just as important as the budget deficit, says Rep. Earl Blumenauer. He is proposing bold legislation for a short-term fix, and another bill to address the longer term funding challenges.

The bold short-term fix legislation would increase the federal gas tax by fifteen cents over three years to 33.4 cents per gallon (from the current 18.4 cents). It also indexes the gas tax to inflation, and then “confirms Congress’s intention to replace the gas tax with a more equitable, stable source of funding by 2024.”

This idea doesn’t come out of the blue: It was proposed in the Simpson-Bowles budget reform recommendations (which suffered a quick death), and recommended by two federal blue ribbon commissions. Every penny increase in the gas tax would yield about $1.5 billion, according to many experts in financing circles.

[Read Blumenauer's news release about his proposal, H.R. 3636 The Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Act, and the bill text.]

Blumenauer commented:

“Today, with inflation and increased fuel efficiency for vehicles, the average motorist is paying about half as much per mile as they did in 1993. It’s time for Congress to act.  There’s a broad and persuasive coalition that stands ready to support Congress, including the U.S. Chamber of Commerce, National AFL-CIO, the construction and trucking industry, cyclists, professional groups, numerous associations of small and medium businesses, local governments, and transit agencies. We just need to give them something to support.”

It’s been 23 years since the federal gas tax was last increased. Inflation, increased vehicle fuel efficiency, increased cost of construction materials and labor, and a decline in driving has eroded the purchasing power of gas tax revenue – despite more people driving.  A one-two punch of a recession and Congress occasionally setting funding levels based on too-optimistic revenue projections also didn’t help.

[To address the longer-term funding challenge, Rep. Blumenauer wants the federal government to take a serious look at a Road Usage Fee Pilot Program. See our story, "Proposal Would Offer Grants for States to Test Road Use-VMT Tax."]

Consequently Congress has transferred about $55 billion from the general fund revenues to transportation programs since 2009. Next October, when MAP-21 expires, the Highway Trust Fund will require almost $15 billion a year in addition general fund revenue simply to maintain 2009 funding levels.

Rep. Blumenauer at 2012 Bike Summit. Image: Jonathon Maus, BIkePortland.

Rep. Blumenauer at 2012 Bike Summit. Image: Jonathon Maus, BIkePortland.

Will this bold proposal save federal transportation?  It could, if enacted. But the proposal will be like a third rail, despite support from a broad range of interests from business to labor to the construction industry. Nearly all Republicans will oppose it, though many understand the need for and value of increased transportation spending. But Blumenauer’s proposal faces an uphill battle even inside his own Democratic party.

One of the biggest Democratic opponents is likely to be the White House. The Administration has consistently opposed a gas tax increase, going back to when then-Senator Obama was first campaigning for the White House. And a “senior Democrat on the Transportation Committee was brutally honest about Blumenauer’s plan for the gas tax and VMT bills: “I have no idea what he’s doing. . . .”We couldn’t get a nickel past Obama,” the lawmaker said of a failed 2009 bill that was derailed by the administration’s opposition to the 5-cent gas tax hike needed to pay for it.”

The National Surface Transportation Policy and Revenue Commission, which was non-partisan and citizen/industry-led, recommended increasing the federal gas tax by 25 to 40 cents and the diesel tax by 15 cents. The non-partisan National Surface Transportation Financing Commission recommended increasing the federal gas tax by ten cents, and the diesel tax by fifteen cents.
Sources:

Blumenauer Joined by Leaders in Transportation, Commerce, Labor, Construction to Introduce UPDATE Act to Fund Infrastructure,” Rep. Blumenauer news release

Earl Blumenauer tries to break highway funding gridlock,” Politico