Creative Ideas for Generating Funds
February 20, 2013 – Finally some creative ideas are being floating to finance infrastructure investment. According to NSSGA, the top Democrat on the House Transportation and Infrastructure Committee’s Highways and Transit Subcommittee, Rep. Peter DeFazio (Ore.), has proposed a slow and steady increase in the 18.4-cents-per-gallon federal gas tax rate by indexing it to the Consumer Price Index – or the U.S. Department of Transportation’s National Highway Cost Construction Index – and issuing 20-year bonds to cover near-term spending needs.
DeFazio says his bond-issuing plan would go further than a simple increase of a few cents-per-gallon to the gas tax by immediately bringing "$120 [billion to] $140 billion" into the Highway Trust Fund. This could win public support by putting thousands of people to work right away and "people would see construction activity everywhere in America," he said, and it would soften the blow of a 1-cent to 2-cents-per-gallon increase per year. DeFazio also proposed a separate idea that would shift some of the tax burden away from drivers and onto oil producers by adding a levy of $1 to $5 per barrel. He estimates this alone would raise between $24 billion (for a $1-per-gallon increase) and $120 billion (for a $5-per-gallon increase). "It has a number of merits. One is foreigners would be paying for part of our infrastructure investment," DeFazio said. "People wouldn’t mind that too much." He acknowledged that some of that cost might be passed on to consumers, but that competition between energy producers would nullify much of it.
Published: Wednesday, 20 February 2013 17:32
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