Top GOP Senator won’t rule out gas tax hike for infrastructure upgrades

The Senate’s No. 3 Republican left the door open on Tuesday to raising the federal gasoline tax to pay for infrastructure improvements — an idea currently being considered by the White House, but one that has repeatedly run into a buzz saw of opposition on Capitol Hill.

“I’m not ruling out anything at this point,” Sen. John Thune (R-S.D.), chairman of the Commerce, Science and Transportation Committee, told reporters. “I think we need to keep our options open in terms of how we get that done.”

“We have members who are open to all ideas about how to pay for [infrastructure],” he added.

{mosads}

White House officials told a group of moderate House lawmakers last week that they are considering a gas tax hike to help offset President Trump’s infrastructure proposal.

An industry source told The Hill that the administration is eyeing a 7-cent increase, though it’s unclear if the proposal would be included in the initial infrastructure legislation or if the administration will push to have it added at the committee level.

It would be the first hike in the federal gasoline tax in over 20 years. The Highway Trust Fund, which provides money for road construction and other transportation projects across the country, is financed by a federal fuel tax of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel.

“If anything is done on the Highway Trust Fund, it will happen in the context of an infrastructure discussion,” Thune said. “If that’s what we’re going to use to pay for infrastructure in this country, then we’ve got to figure out a way to fund the trust fund.”

Trump signaled some openness to raising the federal fuel tax earlier this year, telling Bloomberg News that it’s something he would “certainly consider.” But the idea, a politically fraught issue that lawmakers have avoided for years, quickly ran into fierce opposition from GOP lawmakers and influential conservative groups.

Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, said last week that there is still little appetite in the lower chamber for a hike in the gas tax right now.

But while there is little enthusiasm at present, he added that members could get on board with the idea if the White House gets publicly involved on the issue and actively advocates for an increase.

Lawmakers may also be short on funding options by the time they get to an infrastructure package, likely sometime next year.

Some members want to pay for Trump’s rebuilding initiative using the revenue from repatriation, or taxing corporate earnings stored overseas at a one-time, lower rate when the funds return to the U.S.

Trump has also floated the idea of linking tax reform and infrastructure together.

But the administration and GOP leaders have shown no indication that they will include any money for infrastructure in the tax-reform package. Instead, they want to use repatriation to help pay for tax cuts.

“For right now, I think we’re going to have to keep [infrastructure and tax reform] separate,” Thune said. “There is some argument and merits, I would say, to doing all these things at the same time on taxes, but I don’t think that’s going to happen.”