Rep. Earl Blumenauer (D-Ore.) announced the proposal at a news conference, flanked by an array of labor, construction and business leaders. It would raise the federal tax on gas to 33.4 cents per gallon and on diesel to 42.8 cents.
The tax has not been increased since 1993, and the Highway Trust Fund, into which the revenue flows, has suffered because the tax has not kept pace with inflation. Plus, improvements in vehicle fuel economy have reduced consumption.
“Congress hasn’t dealt seriously with the funding issue for 20 years,” Blumenauer said. “With inflation and increased fuel efficiency, especially for some types of vehicles, there is no longer a good relationship between what road users pay and how much they benefit. The average motorist is paying about half as much per mile as they did in 1993.”
His proposed tax increase was endorsed by AAA.
“Though it would be easier to simply kick the can down the road, today’s proposed legislation takes a necessary step forward in fostering debate on an important issue that many policymakers have been reluctant to address,” said Kathleen Bower, vice president of public affairs for the automobile club. “The country desperately needs additional funding for infrastructure and, for the moment, there is no better means than the fuel tax. The proposed increase is well overdue and in line with what most experts suggest would be appropriate.”
The trust fund no longer draws enough money to pay for the nation’s highway and transit bills. Although states levy their own gas taxes — the average combined gas tax bill was 30.4 cents per gallon at the start of the year — they count on Washington for about half of their transportation funding.
To fund the current federal transportation bill, which expires next year, Congress transferred more than $50 billion from general tax revenue. Blumenauer cited estimates that the trust fund will need $15 billion more each year if Congress decides to keep funding at current levels when it considers a new long-term surface transportation bill in 2014.
He said that phasing in a 15-cent-per-gallon tax over three years would raise about $170 billion in the next decade.
Taking no action on the trust fund is not a viable option unless Congress is prepared to slash transportation funding, transfer the tax burden to the states or agree to a massive transfer of money from general tax revenue.
“It is time to be honest with ourselves and with the American people,” said Terry O’Sullivan, general president of the Laborers’ International Union of North America, who supported Blumenauer’s proposal. “Partisan rhetoric knee-jerk reaction and anti-tax extremism will not solve this problem or make it go away.”
The American Society of Civil Engineers concluded last month that a $2.7 trillion investment in transportation and other infrastructure is needed by 2020 if the United States is to remain competitive in the global marketplace. Three years ago, the Federal Highway Administration estimated that more than $70.9 billion worth of repairs were needed to maintain safe infrastructure.
On the Senate side, Barbara Boxer (D-Calif.), who chairs the Environment and Public Works Committee, has proposed levying a tax on fuel at the wholesale level, collecting money at the refinery rather than the pump.
Blumenauer sought to bolster his bill’s chances with tax-averse House Republicans by displaying a coalition of support at Wednesday’s news conference.
“There’s a broad and persuasive coalition that stands ready to support [this in] Congress,” he said, “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.”
He pointed out that a gas tax puts the burden on those who use the roadways, “which historically has been acceptable to Republicans, including Ronald Reagan, who increased the gas tax by a nickel a gallon in 1982.”
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