Democratic Lawmakers Want Alternatives To Federal 18.4 Cent Gas Tax

January 11, 2016

The Hill reports that a letter to Transportation Secretary Anthony Foxx, Rep. Peter DeFazio (D-Ore.) and Del. Eleanor Holmes Norton (D-D.C.) said  states should begin experimenting with new infrastructure funding mechanisms now, despite the fact that Congress just passed a five-year, $305 billion highway bill last year. DeFazio and Norton said the recently completed highway bill does not address a shortfall in transportation funding that forced lawmakers to turn to a package of about $70 billion worth of offsets from the federal budget to pay for five years worth of construction projects.

"The FAST Act is a great achievement, but it does not resolve the long-term solvency challenges of the Highway Trust Fund," the lawmakers wrote. "To ensure that we are not in the same position four years from now, we must immediately begin to identify real, workable funding solutions to carry our surface transportation programs through the 21st century," they continued. “A safe, efficient surface transportation network is fundamentally necessary to our quality of life and our economy. But we cannot fund this network relying on current Highway Trust Fund revenues.”

The new bill formally reauthorized the collection of the 18.4 cents per gallon gas tax, which is typically used to pay for transportation projects.The federal gas tax has been the traditional source for transportation funding since its inception in the 1930s, but lawmakers have resisted increasing the amount that drivers pay. The federal government typically spends about $50 billion per year on transportation projects; the gas tax only brings in $34 billion annually.

Suggestions include privatizing some tax-collection services and using dividends from the Federal Reserve Bank.

Source: The Hill; Keith Laing