Leaders Eye Mix of Options to Pay for New Road Bill
This story appears in the Jan. 26 print edition of Transport Topics.
WASHINGTON — Congressional leaders of transportation policy committees said corporate tax reform, private sector investments, and possibly raising fees for highway users are ways to fund a five-year highway bill that industries, including trucking, say is vital for business.
Sen. James Inhofe (R-Okla.), chairman of the Environment and Public Works committee, and his House counterpart Rep. Bill Shuster (R-Pa.), chairman of the Transportation and Infrastructure Committee, told Transport Topics in separate interviews that they are asking colleagues, primarily conservative Republicans, to support a mix of proposals before federal funding for highway programs expires in May. Inhofe stressed that about $15 billion would be required annually to fund a multiyear highway measure. To do that, Congress would need to identify programs in the federal budget that “aren’t nearly as significant as highways,” adopt public-private partnerships, and even raise certain highway user fees, the senator explained.
“I don’t call it a tax increase. In fact, I’m not going to do that. It’s a user-fee increase,” Inhofe said of the fuel tax. “Ironically, those who are the stakeholders, those who are using it, they’re always advocating a larger user fee on themselves. And, so we need to look at that, which I’ve always done, and see if that should be part of it.”
Shuster is largely in agreement with Inhofe. But he told an audience at the U.S. Conference of Mayors annual meeting on Jan. 22 that a majority of lawmakers would not be in favor of raising fuel taxes: “There are a lot of ideas out there. I know that the popular thing that a lot of people are talking about is the gas tax — the user fee is what it really is. But I just don’t believe the votes are there.”
Congress has not raised the tax on gasoline and diesel since 1993. A large part of the trucking sector and several other groups have said they would pay more in fuel taxes to modernize roads and bridges. The tax on diesel, trucking’s main fuel, is 24.4 cents per gallon; it’s 18.4 cents for gasoline.
The chairmen also said it would be up to the tax-writing House Ways and Means and Senate Finance committees
to present a transportation-funding plan this spring. The Republican chairmen of those panels, Rep. Paul Ryan of Wisconsin and Sen. Orrin Hatch of Utah, have recently dismissed a fuel-tax increase.
Ryan told reporters at the GOP retreat earlier this month that “we won’t pass a gas-tax increase.”
Shuster said repatriation is fast-becoming a popular way to come up with dollars to pay for big-ticket highway programs. Proposals calling for establishing certain funds financed with multinational companies’ repatriated funds might be included in a tax overhaul package this year, senior Capitol Hill aides involved in the legislative process told Transport Topics.
Sen. Barbara Boxer (D-Calif.), the EPW committee’s ranking Democrat, said she would support Inhofe in advancing a long-term highway bill. Last year, when Boxer was the panel’s leader, the committee passed a multiyear highway measure that was not picked up by the full Senate.
In the House, Rep. Peter DeFazio (D-Ore.), the transportation committee’s top-ranking Democrat, said he would support efforts to push ahead with a long-term highway reauthorization.
Boxer and DeFazio are expected to comment on the Republican funding efforts later this year.
Meanwhile, GOP conservatives affiliated with the tea party bloc indicated they would promote proposals this year that aim to reduce federal influence over highway projects. So far, they have yet to unveil their plans.
Funding for the federal Highway Trust Fund is due to run out when the 2012 MAP-21 law expires in May.
Jack Basso, a transportation finance expert with Parsons Brinckerhoff, a global business consulting firm, said that with the May deadline approaching he thinks lawmakers will have to “bite the bullet” on a gas-tax increase because that would generate revenue quickly.
For the long term, Basso added: “What really creates the opportunity in my view would be an overall tax bill moving where this just becomes, for lack of a better term, a minor piece of it. That’s been my experience, and I think it may be, again, how we get this done.”
Joshua Schank, CEO of the Eno Center for Transportation, a Washington think tank, said Congress is now starting to come around to having a six-year bill, which has been advocated by senior Democrats, such as Boxer, and by the Obama administration.
“I think the rest of the world has come around a little bit to the president’s original perspective,” which Schank explained was: “Let’s try to put together a multimodal surface transportation bill for as long as we can.”
