House Unlikely to Pass Fuel-Tax Hike to Fund Infrastructure, Graves Says
This story appears in the May 29 print edition of Transport Topics.
WASHINGTON — The leader of the Highways and Transit Subcommittee in the U.S. House of Representatives is not so certain his colleagues will go for a raise in fuel taxes to back a multiyear infrastructure funding plan this year, despite assurances from senior transportation leaders on Capitol Hill suggesting otherwise.
Rep. Sam Graves (R-Mo.), the subcommittee’s chairman, said that the gasoline and diesel taxes are unsustainable sources of funding when considering the increasing rate in which fuel-efficient vehicles continue to find their way onto the country’s roadways.
Graves made the comments during an exclusive interview with Transport Topics in his Capitol Hill office May 19.
Graves, a policymaker with an agricultural background first elected in 2000, is vying for the Transportation and Infrastructure Committee chairmanship when the current chairman, Rep. Bill Shuster (R-Pa.), steps down at the end of the congressional cycle next year.
Identifying a sustainable source of funding for infrastructure projects is a central policy issue for Graves.
“We’re looking at replacing the gas tax because it’s so regressive,” Graves said. “The fact of the matter is, we’re going to see more and more of those vehicles that don’t pay any gas tax. We need to recover the dollars from those vehicles using the road.”
While revenue from those fuel taxes make up a significant portion of the revenue for a federal highway account, Graves is encouraging colleagues to consider other options: projects backed by private capital, a vehicle miles-traveled fee on motorists and truckers and erecting tolling facilities. This all-of-the-above approach is likely to serve as the model for the transportation panel in the House when it takes up infrastructure legislation either in September or October, Graves noted.
“I’m pretty confident about that, barring anything catastrophic happening, we’ll see a transportation bill coming out of the House,” he said.
House Speaker Paul Ryan (R-Wis.) has not committed to passing an infrastructure bill this year. He stressed, in a recent interview carried by C-SPAN, the need for carving room for the massive legislation that could entail authorizing $1 trillion over 10 years. President Donald Trump is calling for $200 billion in federal funding to incentivize investors with the hope of reaching the $1 trillion mark.
For transportation policy authorizers to advance infrastructure legislation with funding provisions, the tax policy committee would need first to ensure the Highway Trust Fund is sustainable. The trust fund account, backed by revenue from the 24.4 cents-per-gallon diesel tax and 18.4 cents-per-gallon gasoline tax, will need a cash injection in about three years to make up for dwindling revenue. The 2015 FAST Act highway law authorized nontransportation funding to help keep the trust fund solvent for about three more years.
Sensing a lack of urgency on the part of his colleagues on the tax policy Ways and Means Committee, Graves and subcommittee ranking member, Del. Eleanor Holmes Norton (D-D.C.), have been asking them to co-sign their letter urging that reforms to the trust fund be made part of an overhaul of the U.S. tax code. Such an overhaul is expected to come before the House and Senate this summer.
The letter — proposing that “if states are unable to rely on timely reimbursements from the [Highway Trust Fund] for work performed, projects will be halted” — garnered 185 signatures as of last week.
“We’re hoping to get half the House on the letter,” Graves said. “I’m feeling pretty good about getting that title in that package.”
Raising fuel taxes had been Congress’ traditional way of ensuring the trust fund’s solvency. The account is used by the U.S. Department of Transportation to help pay for national roadway projects.
In the past two decades, raising taxes on fuel became increasingly unpopular for a majority of members of Congress, primarily Republicans, because most of them have pledged not to raise taxes while in office. The pledge is spearheaded by Americans for Tax Reform.
The freight sector, including the trucking industry, continues to champion higher fuel taxes to help pay for maintenance and upgrades of roadways, tunnels and ports. Notwithstanding federal action on fuel taxes, nearly two dozen states recently have increased diesel and gasoline taxes to accrue funds for big-ticket road projects.
The congressman also took issue with the Transportation Investment Generating Economic Recovery, or TIGER, grants for infrastructure projects. Members of Congress, and not administrative bureaucrats, are best suited to allocate funding for states and municipalities, he said. From the moment the grants were established in 2009, several Republicans have claimed there had been bias on the part of the Obama administration in selecting the projects.
“The biggest problem with the TIGER grants is that they can be very, very competitive, and very political,” Graves said. “We’d like to get back to Congress making the decisions.”
