July 25, 2014 SIGN IN | REGISTER

Congress Eyes Virginia's Model for Funding Transportation Projects

Tom Williams/CQ Roll Call File Photo
Boxer, left, said last month at a hearing that a percentage highway fee “could bring in more than all of the other taxes bring in for transportation.” Baucus, right, has said it might be difficult in the future to find budget offsets, such as the general fund transfers used to fund the two-year transportation bill passed last year.

Making sure the federal side of those matches is still there is one of the pressing funding issues facing Congress in the next year. The two-year surface transportation authorization passed last year (PL 112-141) relied on more than $21 billion in general fund transfers to keep the Highway Trust Fund solvent through fiscal 2014. Senate Finance Chairman Max Baucus, D-Mont., has said tax-writers won’t be able to find enough budget offsets to pay for a similar general fund subsidy in the next highway bill. But raising motor fuels taxes — even if the levy is assessed at the wholesale, rather than the retail level — continues to face strong opposition in Congress.

“I don’t think it’s fair or reasonable to expect middle-class families to endure a net tax increase,” said Sen. David Vitter of Louisiana, the ranking EPW Republican. “And I don’t agree with that, don’t support that and I don’t think that’s doable in terms of this Congress at all.”

Likewise, energy-producing groups such as the American Petroleum Institute generally oppose increasing taxes on motor fuels, which range from a low of 30.8 cents per gallon for gasoline in Alaska — when state and federal taxes are combined — to 71.6 cents per gallon in California.

Also opposing the Virginia tax changes was anti-tax activist Grover Norquist and his group, Americans for Tax Reform.

“Gov. Bob McDonnell should have known better,” Norquist said in a statement when the tax became effective in July. “He walked down a dark alley with tax and spend Democrats and got mugged.”

Supporters note that while the public generally balks at paying higher taxes, there tends to be support for boosting revenue as long as tangible improvements to transportation infrastructure are obvious.

While policymakers investigate a variety of ideas — including vehicle-mileage taxes — for raising more transportation infrastructure revenue, lobbyists such as Janet Kavinoky of the U.S. Chamber of Commerce contend that none can replace the existing gas and diesel taxes in the short run. Because there already is a well-established system for collecting the current gas and diesel taxes, raising those levies could serve as an efficient bridge to a new form of financing in the future, they say.

“There are multiple revenue options that could work alone or in combination,” Kavinoky said. “But we continue to believe the simplest, most straight-forward and effective way to generate enough revenue for federal transportation programs is through increasing federal gasoline and diesel taxes.”

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