DeFazio Tackles the Eternal Question…How to Fund the Highway Trust Fund?

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With each passing day we are getting closer to September 30, 2014, the day when MAP-21, the legislation funding surface transportation programs, will expire. Therefore, even though Congress just passed a surface transportation bill last summer, work already must be underway on the next bill. However, before Congress can pass another surface transportation reauthorization, a new, long-term, sustainable, funding mechanism must be identified for the Highway Trust Fund. Therefore, Members of Congress have been working on innovative solutions to the age old problem, with innovative solutions continuing to come out from Members on both sides of the aisle.

One of the more recent proposals comes from Peter DeFazio (D-OR), the Ranking Member of the Highways and Transit subcommittee of the House Transportation and Infrastructure Committee and he does touch upon the federal gas tax. The draft proposal would increase the federal gas tax by about one cent each year, by indexing the current 18.4 cents-per-gallon tax to inflation in construction costs and to increases in auto fuel efficiency standards. According to DeFazio’s office, tying the gas tax to the consumer price index would bring in about $50 billion over 10 years, while tying it to the Department of Transportation’s National Highway Cost Construction Index would yield $150 billion over the same period. The resulting revenue would then be used to back the issuance of $100 billion in bonds that would be paid off in 10 years.

At this time the Obama administration has asked DeFazio to provide more details on his proposal and other Members of Congress are listening. Earlier this year Obama once again asked Congress to provide an additional $50 billion for roads and bridges, but has not suggested sources for the money. The DeFazio proposal could potentially provide some of the much needed revenues for the Highway Trust Fund. Next, Chairman of the full Transportation and Infrastructure Committee, Bill Shuster (R-PA), has looked at the proposal and maintains his stance that all funding options for the Highway Trust Fund remain on the table.

The concept is interesting and ASCE does support both raising the gas tax and indexing it to inflation. We will have to wait and see if the idea is included in a new surface transportation reauthorization as Congress begins work later this year.

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