POLITICS: PennAve

Congress grapples with highway funding

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Congress,Transportation,Taxes,Tea Party,PennAve,Zack Colman

Congress is examining whether to increase the federal gasoline tax as a way to shore up financing for the nation’s aging highways and bridges.

At issue is the 18.4-cents-per-gallon tax, which helps finance the Highway Trust Fund and hasn’t been raised since 1993. The federal fund covers about 45 percent of the cost of maintaining and building the nation’s highway system, bridges, tunnels and other infrastructure.

Highway advocates say the transportation infrastructure is falling apart. Citing a Transportation Department report, the American Road and Transportation Builders Association said highway improvements would hit $130 billion in 2016.

The fund has failed to keep pace with those expenses -- the nonpartisan Congressional Budget Office predicts it will fail to meet obligations by 2015 and be in the hole by $92 billion by 2023.

Many lawmakers, however, are loath to raise the tax, especially during an election year. That has some conservatives angling to dump the funding responsibility entirely onto the states.

The diverging philosophies highlight some of the problems with striking a long-term plan for the federal highway bill: Tea Party Republicans want to pass all the responsibility to the states, some Democrats want to raise or alter the tax and President Obama has opposed gas tax hikes in the past.

“I don’t think there is a great solution,” said Rep. Tom Petri, R-Wis., chairman of the House Transportation and Infrastructure Highways and Transit Subcommittee.

The Highway Trust Fund’s problems are largely structural: Gasoline demand declined during the recession as Americans drove less; drivers are buying more fuel-efficient automobiles, with stricter fuel-efficiency standards coming down the pike; people are turning to electricity and alternative fuels; the trucking industry is increasingly relying on natural gas; and more people are moving into cities and relying on other modes of transportation, such as public transit and bicycles.

In 2012, lawmakers approved a two-year stopgap measure instead of the usual four- or five-year deal that relied on borrowing from the general Treasury. Since 2008, the Highway Trust Fund has borrowed $41 billion, and is authorized to borrow another $12.6 billion next year. The Congressional Budget Office estimates the fund needs a $15 billion infusion in 2015 to meet $51 billion of anticipated obligations.

Lawmakers want to avoid that scenario.

“Last time around, it was all made up with other taxes. The question is, what’s the tax? What’s the revenue source?” said Senate Finance Committee Chairman Max Baucus, D-Mont., whose panel oversees the gasoline tax.

Some conservative Republicans want to limit the scope of the fund, saying that it covers too many projects, such as road beautification and maintaining bicycle lanes.

Rep. James Lankford, R-Okla., a member of the conservative Republican Study Committee, said he supports the trust fund so long as it finances maintenance of highways used for interstate commerce. But he supports measures that would shift that responsibility completely to the states. Petri, underscoring a Republican divide, said he wasn’t sure that move “would be the responsible thing to do.”

Some states are getting in front of the issue. Oregon, for example, is experimenting with taxing motorists for miles driven rather than through gasoline sales. And some states such as Virginia have created private-public partnerships that include toll roads.

Rep. Earl Blumenauer, D-Ore., has proposed phasing in a 15-cent-per-gallon tax hike, indexed to inflation, leading to an alternate, congressionally approved financing scheme in 2024. Sen. Barbara Boxer, D-Calif., has floated the idea of imposing the tax at the wholesale level rather than at the pump. Those ideas face long odds. The House Ways and Means Committee, which handles the gasoline tax, said it would oppose any tax increase. “[T]his committee has no interest in raising the gas tax,” committee spokeswoman Michelle Dimarob said in an email.

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