WASHINGTON, D.C. — Rep. John Mica, R-Fla., severely downplayed the prospects of a federal fuel tax hike, telling event attendees they’re “smoking the funny weed” if they believe there is enough political will to boost highway funding via the pump.
The pessimism from the outgoing House Transportation and Infrastructure Committee chairman comes as transportation proponents pressure Congress and the Obama administration to raise the federal fuel tax as part of a Grand Bargain to prevent the so-called fiscal cliff. Rep. Bill Shuster, R-Pa., the incoming committee chair, recently said he is open to a fuel tax hike, further boosting optimsm that the main generator of highway funding could be raised for the first time since 1993. The transportation industry faces its own cliff when the two-year surface transportation bill expires at the end of September 2014, Mica told attendees of a PolticoPro event Wednesday.
Former T&I Committee Chairman Jim Oberstar said the negativity was largely a result of the Tea Party and that a gas tax hike, coupled with other revenue sources, would allow the nation to maintain highway spending. The current $105 highway bill depends on budgeting trickery and general funds to plug the gap between spending plans and the HTF. Oberstar, a member of Congress from 1973 to 2011, pointed to how former President Reagan raised the fuel in 1982 because he understood the hike was user-based and would create jobs. As he signed the hike into law, Reagan tapped the microphone and quipped, “The sound you here is the concrete cracking around my feet.”
With the future of federal transportation funding uncertain, states are increasingly raising their own taxes, increase tolling and borrowing more, said former Pennsylvania Gov. Ed Rendell said. Sixty-eight percent of transportation funding ballot initiatives passed in 2010, and 16 of the 17 of similar type ballot initiatives passed on Nov. 6. Rendell said the federal government should expand Transportation Infrastructure Finance and Innovation Act to $10 billion annually; lift the cap of private activity bonds to encourage more private investment; and bring back Build American Bonds, which are taxable municipal bonds.
“We are spending far too little on our infrastructure,” he said. “Our infrastructure is going to hell in a hand basket.”
But as states push to increase transportation funding, they are increasingly drawing the ire of fiscal conservatives. Grover Norquist earlier this week blasted the state of Virginia for considering the indexing of its state gas tax to inflation. The change to the gas tax is needed to take on the state’s infrastructure needs, particularly as more fuel-efficient vehicles bring less fuel tax revenue to the state, said Virginia Transportation Secretary Sean Connaughton.
“The governor is very intent to introduce a package that will bring at least $500 million more in transportation revenue a year,” he said.
Connaughton said the federal government needs to let states take more control of how they use their dollars from Uncle Sam. He said federal caveats, such as a need to spend on historical preservation, have resulted in the state having up to roughly $40 billion in federal money it can’t spend where it needs to. The current transportation bill, known as MAP-21, gives the states a greater ability to use the dollars toward priority projects, he said.
Rendell warned that the push for funding devolution is often just code for less federal funding. The push to give more state control may also come to odds with the federal push to create a national freight network and have each state identify how their own freight systems fit into the national plan.