Senate Panel Drops Proposal to Increase Heavy-Truck Tax

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

Leaders of the Senate Finance Committee, in an effort to gain more Republican support, tweaked a highway spending bill on June 26 by removing a provision that would have imposed higher fees on heavy trucks.

Finance Committee Chairman Ron Wyden (D-Ore.) said he made several modifications to a bill that would approve about $9 billion for a cash-strapped federal Highway Trust Fund.

The panel is expected to take up the legislation again the week of July 7.

Ranking member Sen. Orrin Hatch (R-Utah) and Sen. John Thune (R-S.D.) sought the heavy-truck provision’s removal, which would have changed the maximum heavy-vehicle use tax to $1,100 from $550.

In a letter to Wyden and Hatch, American Trucking Associations President Bill Graves said that “removing this obstacle to passage of a bipartisan bill represents a very positive step toward development of a short-term solution.”

Under the provision, which would have raised more than $1 billion over 10 years, trucks weighing a minimum of 55,000 but not exceeding 97,000 pounds would have been charged $100 and an additional $22 for every 1,000 pounds in excess of 55,000 pounds.

The tax would have been capped at $1,100 annually for trucks weighing more than 97,000 pounds. This would have resulted in a $650 annual tax for trucks registered at 80,000 pounds.

Thune said he was “particularly pleased” with the change but stressed that going forward the bill “will need to include reasonable spending reforms.”

Other revisions to the bill included proposing a transfer of $750 million from the Leaking Underground Storage Tank Trust Fund to the Highway Trust Fund, changing the tax rate for liquefied natural gas to 14.1 cents per gallon at the pump and noting in the bill

that the Senate realizes the urgency to approve a long-term funding solution for the Highway Trust Fund.

While Wyden’s proposal did not call for raising the tax on motor fuels, a position backed by the trucking industry, a few senators have pushed ahead with that idea.

Sen. Tom Carper (D-Del.), a member of the Finance panel, is proposing annual 4-cent increases in the gas and diesel taxes until the gas tax reaches 30.3 cents per gallon and the diesel tax reaches 36.3 cents per gallon.

“When you think about it, gas prices can go up and down 4 cents or more in the course of a week, so 4 cents in a year is a pretty reasonable price to pay for having good-quality roads and transit and safe bridges,” Carper said. “Things that are worth having are worth paying for.”

Wyden said he has not ruled out “outside the box” proposals to boost highway funding and said he and Hatch would reach out to Rep. Dave Camp (R-Mich.) to quell partisan concerns regarding the legislation’s banking and tax reforms.

“This really isn’t the time for the two parties to go to their respective corners and battle it out,” Wyden said. “It’s crunch time on transportation.”

Camp, chairman of the tax-writing committee in the House, objected to Wyden’s proposal and indicated that tax increases to pay for more spending would not be approved by the full House.

“I am disappointed that the Senate appears to be heading down a partisan road on highway funding. Simply put, there is no way tax hikes to pay for more spending will fly in the House,” Camp said last week. “I am looking at policies that have a history of bicameral, bipartisan support, and I intend to have the Ways and Means Committee ready to act early in July.”

Last week, House Democrats Chris Van Hollen of Maryland and Sandy Levin of Michigan offered a bill that would move $19.5 billion into the trust fund by making it difficult for corporations to lower their U.S. tax bill when they merge with foreign companies. That bill has yet to be considered at committee.

A recent estimate by the Congressional Budget Office determined that about $8 billion would be required to keep the trust fund solvent through the end of the year.

For every gallon of gasoline sold in America, 18.4 cents goes into the trust fund. The fund gets 24.4 cents for each gallon of diesel sold.

When Congress established the interstate highway system in 1956, lawmakers decided that the money to pay for it should come from the people who used it.