Bipartisan Senate duo pitch US fuels tax hike

| Jun 18, 2014 3:54PM EDT

WASHINGTON — With few short-term solutions available to solve the nation’s highway funding crisis, some in Congress are willing to back raising and indexing the federal fuels tax to inflation despite the political risks.

Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., today pitched a plan to raise the fuels taxes over the next two years by six cents each year and then index the taxes to the Consumer Price Index. But even its backers doubt whether the bill will be passed by the end of month in order to save the Highway Trust Fund, the main engine of highway funding, from becoming insolvent as early as next month.

“This proposal provides the kind of long-term funding solutions that virtually every independent, bipartisan commission has said are needed to repair and upgrade our aging transportation network,” Associated General Contractors of America CEO Stephen Sandherr said in a statement. “As important, by finding the courage to cross aisles and tackle difficult funding questions, the Senators are demonstrating the legislative process at its finest.”

With little hope of saving the HTF through reform, Congress will likely inject money from the general fund into the trust fund to maintain federal spending for highways, roads and bridges. But the inability of Congress to plug a gap between what it wants to spend and what is collected through federal fuels taxes has already done damage. Many states have pulled back on long-term infrastructure projects because of funding uncertainty, meaning shippers and transportation providers can expect to grapple with increased highway congestion.

Congress needs to find about $100 billion to maintain surface transportation funding over the next decade. That level of spending would at best maintain the current system, not provide additional capacity needed to handle expected freight growth.

Recent proposals to shore up the HTF include taxing oil companies by the barrel or using savings found by cutting U.S. Postal Service delivery on Saturday. But those ideas face stiff opposition and are unlikely to come to fruition in the coming months — if ever.

Transportation proponents, including the U.S. Chamber of Commerce, have steadily urged Congress and the Obama administration to take the most straight-forward and proven approach: raising fuels taxes. But even though the fuels taxes — an 8.4-cents-per-gallon gasoline tax and 24.4-cents-per-gallon diesel tax — haven’t increased since 1993, Obama and most in Congress balk at the idea.

Some members of Congress have candidly said seeking a fuels tax increase is politically infeasible and downright risky when reelection challenges are near, a case for some facing midterm elections in early November. But there are also more signs that the general public isn’t as averse to paying more at the pump as legislators say they are. A recent AAA poll, for example, found that 51 percent of roughly 2,000 people surveyed would be willing to fork over more dollars for gas if roads and highways were improved as a result. And the editorial board of the USA Today, one of the most read newspapers in the nation, yesterday backed raising the fuels tax.

Congress tends to move slowly, particularly when hard decisions are involved, but the recent pitch suggests members are realizing they don’t have any other option in the short term than to back a tax hike.

Contact Mark Szakonyi at mszakonyi@joc.com and follow him on Twitter: @szakonyi_joc.