WASHINGTON -- There’s an easy solution to stop the federal highway fund from going broke at the end of July, the head of the American Trucking Associations told Congress Wednesday -- raise the gas tax.
Bill Graves, the Republican former governor of Kansas, delivered that message in testimony to the House Ways and Means Committee, telling lawmakers at the long-awaited hearing on fixing the highway fund that eventually, whether they want to or not, they’ll have to hike the tax.
“Congress must find the courage to admit what I believe it already knows,” Graves said after explaining why his industry -- which paid more than $16 billion in fuel taxes in 2013 -- believes paying even more tax is the best option.
Graves also noted that -- like six states this year -- he raised the Kansas gas tax when he was governor by explaining clearly to state residents why it had to be done. "It was, I confess, a little easier than I thought it would be," he said.
At the root of the problem, he said, is that the federal tax of 18.4 cents a gallon (24.4 cents for diesel) hasn't been raised since 1993, and it has failed to keep up with inflation, leaving Congress to find ad-hoc methods to keep the fund solvent with short-term cash infusions.
The funding uncertainty causes delays in construction projects and raises costs, even as many infrastructure experts believe not enough is being spent on transportation to begin with.
Graves and other witnesses Wednesday ran through a number of other ways to fund roads and bridges, including tolls, taxes on miles driven, oil taxes, public-private partnerships, or just funding highways out of the general revenue fund.
Graves said all of those options have flaws. Tolls are uneven and inefficient; accurately taxing mileage on hundreds of millions of vehicles still isn’t practical; taxing oil has several downsides; partnerships have proven to be a mixed bag, and scrapping the gas tax in favor of annual appropriations creates even more uncertainty than already exits, he said.
Wednesday’s hearing sounded all too familiar, Graves added, because many of the ideas had been proposed the last time the fuel tax was raised, and lawmakers declared the nation had to find better ways to fund transportation projects.
“Today’s conversation has been taking place for 22 years and I believe it’s time for Congress to acknowledge in the near term that the fuel tax continues to be the lesser of all the infrastructure funding evils,” Graves said. “I believe it’s the only funding option that makes sense.”
Congress has passed 34 stopgap measures to keep the fund operating while failing to find that mythical new way to pay for construction.
“Roads and Bridges aren’t free, and they’re certainly not cheap, yet Congress has been operating under the assumption that pennies might fall from heaven,” Graves said.
“We know the fuel tax works,” he added. “It would continue to be viable for years if the rate were raised.”
Committee Chairman Paul Ryan (R-Wis.) flatly rejected the idea.
“We’re not going to raise the gas tax,” Ryan said.
Still, Graves wasn’t deterred.
“The whole business community has conveyed the message that they would support a fuel tax increase,” Graves said just after the hearing ended. “Many members of Congress have said, thank you, but we’re not interested in that approach, we’re going to try other, as I said, outside-the-box thinking, creating financing options. It feels like we’re getting close to the point where they’re starting to realize that those just don’t exist as many of them hoped they would.”
If Congress continues with the stopgap approach, it will have to come up with about $3 billion more this year, said Chad Shirley of the Congressional Budget Office. Next year, the tab would be $11 billion from the general tax funds, and the price tag would hit $22 billion by 2025.
A bipartisan group of lawmakers has proposed fixing the shortfall simply by indexing the gas tax to inflation, as well as adding a one-time up-front payment, but Ryan appeared to foreclose that option Wednesday.
Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.
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