Raising the federal gasoline tax has been a goal of many transportation policy and industry analysts, though they sometimes roll their eyes when they talk about it or smile ruefully. One lobbyist describes it as a glowing ember, carefully nurtured for years in the hopes that it could someday spark a change.
There’s a growing sense in the transportation industry, however, that this year a serious discussion about higher gas taxes could be rekindled, though they hesitate to speak too openly about it out of worry that their enthusiasm could halt the momentum.
“You’re starting to see a lot more discussion about it than we’ve had in a long time,” said Brian Deery, senior director of the highway & transportation division of the Associated General Contractors of America.
The Highway Trust Fund, which pays for much of the nation’s road work and transit projects, has been shrinking as motor vehicles have become more fuel efficient, yielding less tax revenue.
Congress is in the process of working out a deal to shore up the beleaguered fund until the end of May. That would give lawmakers about 10 months to mull a long-term transportation funding plan that might, just might, include higher gas taxes.
A big change is the support that the idea has received from Republican lawmakers. Sen. Bob Corker, a Tennessee Republican, recently joined with Sen. Christopher S. Murphy, a Connecticut Democrat, to suggest boosting the gas tax by 12 cents per gallon. That would bring it in line with where it would have been if it had kept up with inflation since the tax was last raised in 1993 to 18.4 cents per gallon.
Sen. Michael B. Enzi, R-Wyo., also supports indexing the gas tax to inflation, which would allow it to rise.
“Sen. Enzi believes there needs to be a long-term solution for funding the highway trust fund and all options should be on the table,” said his spokesman, Daniel Head. At its current level, the gas tax “can’t keep up with today’s need for infrastructure at today’s cost.”
Corker says there are other Republicans who share his views. For now, though, they are hesitant to come forward, he says, though that may change once the primaries and the general election are out of the way.
“There are a number of people that know it’s the most common-sense way of dealing with it, especially if you have tax offsets,” he said. “People, with everything that’s happening this fall, are not quite ready” to sign on.
Interest groups including the U.S. Chamber of Commerce and the AFL-CIO agree that raising the gas tax is necessary. The venerable automobile group AAA has become more outspoken in its support of a higher gas tax and recently endorsed the Corker-Murphy proposal.
Even the American Petroleum Institute, while it does not explicitly support higher gas taxes, is not dead-set against the idea either.
“We leave it to Congress and the president to set the rate at a reasonable level,” said API spokesman Brian Straessle, provided that the money in the trust fund remains “dedicated to funding transportation infrastructure.”
Meanwhile, 14 states — both red and blue — have seen their state gas taxes go up in the past two years, either through legislation or because their taxes are pegged to inflation, according to the Institute on Taxation and Economic Policy.
The argument in favor of a higher gas tax is mathematical: There simply is nothing else, advocates say, that could generate the necessary money for the country’s transportation infrastructure.
“It’s really Congress’ obligation at this point to decide what the solution is going to be,” said one industry representative. “From our perspective it needs to be long-term and reoccurring. It needs to be sustainable and responsible. The gas tax has been a very effective way of doing this. This thing has been studied inside and out by several blue-ribbon commissions.”
Here are the numbers. The 18.4 cents-per-gallon federal gas tax will raise $38 billion this fiscal year, according to the Congressional Budget Office. It’ll cost roughly $53 billion a year to pave the roads, repair the bridges and build the transit systems necessary to maintain the infrastructure system in its current state.
That leaves a substantial deficit, which over the next 10 years will grow to more than $160 billion. At some point in the near future, Congress will have to find a way to fill that gap. Simply transferring money from the general fund is a guaranteed non-starter in this age of fiscal austerity. According to Corker and Murphy, a gas tax increase would cover that deficit.
Shrinking the program to meet the existing revenue would make conservative groups such as Heritage Action happy, but it would raise the hackles of state officials, both Democrats and Republicans. Neither Democratic nor Republican leaders on Capitol Hill are calling for shrinking the program.
There are a few other options, such as raising taxes on truck tires or heavy vehicles or taxing motorists on the miles they drive. But those options either raise far too little money or pose privacy concerns.
Of course taxes are never popular, which is why this one hasn’t budged in two decades. A Gallup poll last year found that two-thirds of respondents opposed higher gas taxes in their state. That has some Democrats and the Obama administration a bit squeamish about calling for a tax increase. But Transportation Secretary Anthony Foxx has said repeatedly that he would consider whatever Congress decides on. Murphy said the White House will sign onto a tax increase if lawmakers manage to enact one.
“Ultimately there’s not going to be a magic money source that’s going to grow on trees,” he said. “We’re going to come back to the gas tax because it’s the most likely, most time-tested way to fund infrastructure.”