Senators Offer Bold Plan to Increase Gas Tax
- Published: Monday, 23 June 2014 16:24
- Written by Rock Products News
U.S. Senators Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.) unveiled the first bipartisan proposal to shore up the Highway Trust Fund by making changes to the federal motor fuels tax, which funds improvements to roads, bridges and transit systems. The proposal would create a long-term, stable funding mechanism for the Highway Trust Fund and enact tax relief for American families and businesses.
|U.S. Senator Bob Corker (R-Tenn.)|
“Growing up in Tennessee as a conservative, I learned that if something was important enough to have, it was important enough to pay for. That’s how we’ve governed in the Volunteer State, which has resulted in the second best transportation system in the country without having one penny of road debt,” said Sen. Corker. “In Washington, far too often, we huff and puff about paying for proposals that are unpopular, yet throw future generations under the bus when public pressure mounts on popular proposals that have broad support. Congress should be embarrassed that it has played chicken with the Highway Trust Fund and allowed it to become one of the largest budgeting failures in the federal government. If Americans feel that having modern roads and bridges is important then Congress should have the courage to pay for it.”
“For too long, Congress has shied away from taking serious action to update our country’s aging infrastructure,” said Sen. Murphy. “We’re currently facing a transportation crisis that will only get worse if we don’t take bold action to fund the Highway Trust Fund. By modestly raising the federal gas tax, we can address a crippling economic liability for this country – the inability to finance long-term improvements to our crumbling national infrastructure. I know raising the gas tax isn’t an easy choice, but we’re not elected to make easy decisions – we’re elected to make the hard ones. This modest increase will pay dividends in the long run and I encourage my colleagues to get behind this bipartisan proposal.”
The federal Highway Trust Fund provides more than half of the country’s spending on transportation projects and will begin to run dry in July likely halting the construction of any new transportation projects without action from Congress.
The federal gas and diesel taxes, which are used to fund this account, have not been updated in more than 20 years despite the desperate need for road and bridge improvements. As a result, the purchasing power of the gas tax is approximately 63 percent of what it was in 1993, and continues to decline. A change to the federal gas tax would not only strengthen purchasing power, it would also create thousands of new jobs and allow states to invest in long-term economic development projects.
The senators’ proposal would increase the federal gasoline and diesel taxes by six cents in each of the next two years for a total of 12 cents. This would provide enough funding to offset current MAP-21 spending levels over the next 10 years and replace all of the buying power the federal gas tax has lost since it was last raised in 1993.
The plan would index the gas tax to inflation, using the Consumer Price Index (CPI), to ensure that it remains viable into the future.
To offset the revenue raised from increasing the gas tax to pay for roads and transportation projects, Corker and Murphy propose providing net tax relief for American families and businesses. Examples of tax relief could include: permanently extending some of the tax provisions in the “tax extenders” bill that already have broad, bipartisan support, creating potentially billions of dollars in permanent tax relief for American families and businesses over the next 10 years alone; or another bipartisan proposal to reduce taxes by at least the amount of revenue raised from the gas tax over the next decade.
Historically, this proposal has received bipartisan support. Presidents Ronald Reagan, Bill Clinton, and George H.W. Bush all raised the gas tax in order to fund the Highway Trust Fund and make infrastructure improvements.
The Highway Materials Group commended Sen. Murphy and Sen. Corker on their bipartisan proposal.
“In light of the pending insolvency of the Highway Trust Fund, this proposal finally addresses the longer-term revenue issues,” the group said. “To prevent the burden of the motor fuels increase from falling so heavily on hardworking men and women, popular tax breaks would be permanently extended.”
The Highway Materials Group is composed of the National Stone, Sand & Gravel Association, the National Asphalt Pavement Association, the Portland Cement Association, the National Ready Mixed Concrete Association, the American Concrete Pavement Association, and the Concrete Reinforcing Steel Institute.
“The group looks forward to working with Senators Murphy, Corker and other members of Congress to ensure the efficiency and cost-effectiveness of America’s surface transportation network, which is essential to business enterprise, economic growth, global competitiveness and the American way of life.”
The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release of a highway funding and tax reduction proposal:
“This proposal provides the kind of long-term funding solutions that virtually every independent, bipartisan commission has said are needed to repair and upgrade our aging transportation network. As important, by finding the courage to cross aisles and tackle difficult funding questions, the senators are demonstrating the legislative process at its finest.
“This new proposal is welcome news, considering that Washington’s prior inability to address the long-term funding needs of our aging highway and transit network has not only made it increasingly difficult for state officials to maintain and expand their existing transportation systems, it has also made it difficult for them to meet debt payments. Moreover, the threat that the highway trust fund will not have enough money to meet our current obligations starting later this summer has already forced transportation officials to delay needed repairs and shelve long-planned expansion projects. These delays have certainly undermined the recovery from an economic downturn that cost over two million construction workers their jobs.
“If we want to modernize our aging highway network, expand transit and make our bridges safer, we need to find a way to pay for it. The senators’ proposal does just that in a way that is as fiscally responsible as it is desperately needed.”
The American Road & Transportation Builders Association also welcomed what it called “the common sense, fiscally-sound and bipartisan proposal from Senators Murphy and Corker” to provide a long-term sustainable funding solution to fix the Highway Trust Fund.
“Congress has patched the trust fund four times since 2008,” the group said. “Every short-term fix requires more money. The fund’s structural deficit now requires $16 billion in additional revenue every year just to maintain current investment for highway and public transportation improvements. It is time to stop pretending this problem will solve itself. Senators Murphy and Corker have provided one potential path forward.”