By driving more fuel-efficient cars and by driving fewer miles than they did back before the 2008-09 recession, Americans are starving federal funding for highways and commuter rail and bus systems across the nation.
Rep. Earl Blumenauer, D-Ore., has a solution: increase the federal tax on gasoline and diesel by 15 cents per gallon, and then turn toward a new approach to taxing miles driven rather than gasoline used. Blumenauer’s tax increase would raise around $170 billion over 10 years, he estimates.
Funding for mass transit has come under renewed scrutiny as investigators pore over the wreckage of a commuter train accident on Sunday in New York that left four people dead.
Alex Wong / Getty Images file photo
Rep. Earl Blumenauer (D-OR) said the one political difficulty is that the gasoline tax "has been as proxy for people's frustration" with "wildly spiking" gasoline prices.
What might surprise some Americans is that much of the federal funding for commuter trains and buses -- as well as for highways and bridges -- comes from the gasoline and diesel tax revenues that go into the federal Highway Trust Fund.
The Highway Trust Fund is split into two parts: the Highway Account, which helps states pay for highways, bridges and tunnels, and the Transit Account, which subsidizes commuter trains and bus systems.
The Highway Account spent $44 billion last year, while the Transit Account spent $7 billion.
But each account spends more than it takes in in the form of gasoline and diesel tax revenues: the Highway Account was $11 billion short in 2013 and the Transit Fund was $2 billion short.
The Highway Trust Fund is in trouble because Americans are driving more fuel-efficient cars and driving less overall – clocking 92 billion fewer miles in 2012 than they did in 2007, according to the Federal Highway Administration.
That means they’re buying fewer gallons of gasoline and that fuel tax revenues aren’t keeping pace with the transportation infrastructure spending Congress has authorized.
Since 2008, Congress has dealt with funding shortfalls by transferring $53.6 billion from the general fund of the Treasury to the Highway Trust Fund. Congress would have to transfer increasing amounts in the years ahead to prevent future shortfalls, the Congressional Budget Office said.
The current tax is 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuels. The taxes were last increased in 1993.
Blumenauer acknowledged the difficulty of calling for a tax increase in a House controlled by Republicans who oppose new tax increases on top of the ones imposed by the Affordable Care Act in 2010 and in the big tax legislation that President Barack Obama signed in January.
“Americans hate the gas tax… I don’t like the gas tax,” the Oregon Democrat told reporters. “It doesn’t work very well, it’s not fair, and it doesn’t reflect true road use and it doesn’t produce enough revenue to meet the current needs, much less the future demand.”
He said the one political difficulty is that the gasoline tax “has been a proxy for people’s frustration” with “wildly spiking” gasoline prices. And he said that “half the American public thinks the gas tax goes up every year – so we’ve got our work cut out for us.”
Calling the tax increase a “user fee” might be one way to sell it. “You’ve heard some quiet whispering that, ‘Hmm, maybe there’s a way to get more revenue that isn’t a tax increase, and fee revenue is a way to do that,” he said. “Our ability to cloak things in the language of the moment is pretty powerful.”
Blumenauer said he has talked to budget negotiators Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D- Wash., about perhaps including his proposal in any deal they agree on. “I think having some fee increases is very likely to be part of what Paul and Patty come up with.”
At the Capitol on Monday Blumenauer brought together a coalition of business, industry and labor union groups, including the American Trucking Association and the U.S. Chamber of Commerce, who all support an increase in the gasoline tax.
T. Peter Ruane, president of the American Road & Transportation Builders Association, said that members of Congress needed to “stop pretending the problem is going to solve itself.” He added sardonically “help is on the way – I understand that Amazon’s new drones will be delivering small packages of courage pills to (1600) Pennsylvania Avenue and Capitol Hill.”
“Right now, gas and diesel taxes are the most transparent, honest and implementable way to address our immediate and near-term problems,” said Janet Kavinoky of the U.S. Chamber of Commerce.
But what if Americans wonder about all that money -- $830 billion – that Congress spent in the 2009 stimulus bill – didn’t a lot of that go to “shovel-ready projects” such as highways, bridges and tunnels?
“If we had spent $800 billion on infrastructure, we wouldn’t be having this conversation and the economy would be moving much better and there would be millions of family-wage jobs,” Blumenauer said. “But we didn’t spend $800 billion on infrastructure; I think the number was about $26 billion. Some of us were apoplectic that it was a drop in the bucket. Forty percent of the stimulus was in tax cuts and lots of other things that were important – medical research – I’m not denigrating it at all. But we put a drop in the bucket for infrastructure.”
State governments do pay part of the cost of highways and mass transit. And in the past year seven states have passed some form of a user fee increase. “Some of them are doing that because they are skeptical that the federal government is going to do its job and increase spending, so they’re taking care of the problem themselves,” Ruane said -- but he added “we have a federal interstate (highway) system” and products made in Ohio have to get to customers in California.
This story was originally published on Wed Dec 4, 2013 4:28 PM EST