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Congress kills talk of gas-tax increase

By Joan Lowy
Associated Press

A person gets fuel after gas prices dropped below $2 a gallon at the Quick Mart in High Point, N.C., Wednesday, Jan. 14, 2015. (AP Photo/Daily Free Press, Laura Greene)

A person gets fuel Wednesday after gas prices dropped below $2 a gallon at the Quick Mart in High Point, N.C. (AP Photo/Daily Free Press, Laura Greene)

WASHINGTON — The new Republican-controlled Congress is facing an old problem: where to find money for highway and transit programs.

With gasoline prices at their lowest in years when the new Congress convened, there had been talk that it might be time to raise federal gas and diesel taxes, which haven’t budged in more than 20 years.

But already, GOP leaders are tamping down expectations, leaving no clear solution to the problem.

“I don’t know of any support for a gas tax increase in Congress,” Sen. John Cornyn, R-Texas, the No. 2 Senate GOP leader, said.

House Speaker John Boehner, R-Ohio, while not entirely closing the door, said there are not enough votes in the House for a gas-tax increase. Rep. Bill Shuster, R-Pa., the House Transportation and Infrastructure Committee chairman, was equally dampening.

“The president has ruled out a gas tax,” Shuster said recently. “I don’t think there’s a will in Congress, and the American people don’t want it.”

The gas tax, now 18.4 cents a gallon, and the diesel fuel tax, now 24.4 cents a gallon, last were increased in 1993. In the meantime, Americans are driving less per capita, cars are more fuel-efficient, and construction costs have gone up.

Fuel taxes bring in about $34 billion a year to the federal Highway Trust Fund, but the government spends about $50 billion a year. The trust fund has been the main source of federal transportation aid to states for more than 60 years.

In that environment, two key GOP senators, Finance Committee Chairman Orrin Hatch, of Utah, and Environment and Public Works Committee Chairman James Inhofe, of Oklahoma, had raised the hopes of transportation advocates by saying raising fuel taxes should be considered along with other options, using the more politically palatable term “user fees.” But the idea appears to be a long shot at best.

Congress has kept transportation programs teetering on the edge of insolvency since 2008 by repeatedly transferring just enough money from the general treasury and making corresponding spending cuts elsewhere in the federal budget to meet obligations for a few more months or, in one case, as long as two years. Each time, finding acceptable spending cuts to offset the transfers gets more difficult.

The latest patch cleared Congress in August only about three hours before Transportation Department officials said it would begin cutting back aid payments to states. That fix is expected to last only through May, when Congress will be back where it started unless lawmakers act sooner.

“The political support for increasing taxes to pay for transportation appears to be very limited,” said Joshua Schank, president of the Eno Center for Transportation, a think tank.

A majority of Americans have made it clear the economic benefits of good transportation outweigh the cost, but they cannot agree on how to pay for new highways or repairs for old ones. An Associated Press-GfK poll in summer, before the plunge in gas prices, showed 58 percent opposed raising federal gasoline taxes to pay for repair, replacement or expansion of roads and bridges. Only 14 percent supported an increase.

The lack of voter enthusiasm for raising gas taxes has not deterred die-hard gas-tax supporters who say it is preferable to a one-time fix because it would ensure a steady stream of money. According to a statement attributed to Rep. Earl Blumenauer, D-Ore., he intends to reintroduce a bill to raise fuel taxes by 15 cents a gallon. He introduced a similar bill last year, but it was not considered by the GOP-controlled House.

According to the statement, Blumenauer estimated the increase would raise an additional $210 billion during the next decade.

President Barack Obama previously rejected a gas-tax increase, instead proposing to close corporate-tax loopholes and use the revenue to pay for infrastructure. His plan would boost highway spending 22 percent and transit spending 70 percent during four years.

At a a transportation conference this week, Transportation Secretary Anthony Foxx said that is still the administration’s preferred option, but he also expressed “openness to ideas that emerge from Congress.”

Sen. John Thune, R-S.D., the No. 3 Senate GOP leader, raised speculation that a fuel-tax increase might be possible when he said all possible options should be considered, including a gas tax increase, but this week he described such a possibility as “unlikely.”

“I can’t see a scenario for some sort of user-fee increase that you’d have to offset with tax relief in some other area,” he said. “Nobody is going to vote for a gas-tax increase.”

Instead, Thune said, closing tax loopholes, especially those that encourage corporations to move overseas, and using the money to pay for infrastructure is his “preferred option.”

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