Senate Panel Criticizes DOT Secretary for Refusal to Consider Higher Fuel Tax

This story appears in the March 30 print edition of Transport Topics.

WASHINGTON — Members of the Senate Environment and Public Works Committee criticized Transportation Secretary Ray LaHood and the Obama administration for refusing to consider an increase in the federal fuel tax.

“The question is how are we going to pay for all the things that we’ve been talking about? I think we need to level with the American people,” Sen. George Voinovich (R-Ohio) said during the March 25 hearing. “It’s going to take a gas tax increase. It’s going to take public-private partnerships. It’s going to take a whole lot of other stuff to get the job done.”

LaHood told the committee the administration was “going to throw out all the ideas that we can throw out and see which ones stick,” including a national infrastructure bank, public-private partnerships and tolls on new highway capacity. However, he said an increase in the fuel tax was “off the table.”

During “these hard economic times, with so many people out of work,” the administration “can ill-afford to tell people we’re going to raise the gas tax,” LaHood said.

Sen. Barbara Boxer (D-Calif.), chairwoman of the committee, told LaHood the administration could not close off funding options ahead of the upcoming debate on the highway bill.

“Before, you said everything was on the table; then you said the gas tax was not on the table,” she said. “I am averse to raising the gas tax . . . [but] we all, including myself, we have to be completely flexible here.”

Similarly, Oklahoma Sen. James Inhofe, the ranking Republican on the committee, said Congress was “going to do what we have to do to get close to $400 [billion] to $500 billion” for the next highway bill.

Boxer floated the idea of indexing the fuel tax to inflation in the future as a middle ground, an idea LaHood told reporters after the hearing he “hadn’t even thought about.”

“It’s the first I’ve heard about that,” he said. “It is something that I have not been thinking about.”

In the past year, two congressional commissions have both recommended not only an increase in the fuel tax, but indexing that tax to inflation in order to keep up with the cost of materials such as concrete and steel.

The administration’s plans for a national infrastructure bank, which would direct funding for road and bridge projects outside the established federal highway program, also was criticized by the committee.

During the campaign, President Obama proposed a $60 billion infrastructure bank, and his administration’s first budget proposal included $5 billion to start a bank.

Sen. Max Baucus (D-Mont.) said he was afraid a national infrastructure bank would “serve urban areas at the expense of rural.”

“I fear that a lot of the money from a national infrastructure bank being proposed by some will go to fund non-transportation items such as urban water treatment or public housing,” Baucus said. “That bank idea will rob future growth of the highway program and will destroy the national scope of our federal highway program.”

Baucus is chairman of the Senate Finance Committee, which has jurisdiction over tax issues related to the highway bill.

LaHood said the administration believes the bank “can bring a pretty good chunk of money, and it’s something that we need to look at.”

Baucus said the country doesn’t need new ways to raise money for infrastructure; it needs existing taxes and fees to bring in more money.

“We’ve got lots of financing mechanisms to pay for surface transportation. Mechanisms aren’t the problem,” he said. “The problem is funds. We don’t need new mechanisms.”