Gas tax push on fumes, House chairman says

Congress is unlikely to pass an increase in the federal gas tax this year, the chairman of the House Transportation Committee said Thursday.

Rep. Bill Shuster (R-Pa.) said a deal to boost U.S. infrastructure funding will likely have to find an alternative source of revenue, potentially as part of a broader tax reform package, because the tax hike won’t pass muster with members of Congress.

{mosads}”I know the popular thing that a lot of people are talking about is the gas tax. But I just don’t believe the votes are there in the Congress at this point to do that,” Shuster said in a speech to the U.S. Conference of Mayors in Washington. 

“It seems that … the number one source that’s being talked about is this repatriation of funds,” Shuster continued. “So as we go through this process and tax reform, it’ll be part of tax reform. We’ll figure out how to get there.” 

Lawmakers have expressed new hope for an infrastructure funding deal in recent weeks as gas prices across the U.S. have dropped sharply. 

The 18.4 cents-per-gallon gas tax is the primary source of revenue for funding transportation projects, and infrastructure supporters have been pushing to increase it for the first time since 1993, arguing the time is right now that drivers are paying less at the pump than they have in years. 

Shuster, who has opposed prior efforts to increase the gas tax, said Thursday that passing a long-term transportation bill this year is “paramount” for lawmakers. 

“In my travels around the country in the last two years, it’s become very apparent that producing a long-term bill, a five or six-year bill, is, I think, absolutely critical and paramount,” Shuster said. 

“The first priority is to … provide some certainty to those of you out there that have to plan these projects,” he continued. “The states, the cities, the companies that actually build need to know what the — what the long-term plan is so they can make the investments to be ready to repair bridges and build roads.” 

Shuster added that he believed transportation funding could be an area where Democrats and Republicans could find consensus later this year. 

“We’re looking for places that we can work together with the president, and I think one of those places is in transportation and infrastructure in this country,” he said. “The president mentioned it — not as much as I would’ve liked, but he mentioned it in his State of the Union address.” 

Obama said in his speech on Tuesday night that he also thought bipartisan agreement on transportation funding was possible, although he steered clear of the debate about raising the gas tax. 

“The truth is, when it comes to issues like infrastructure and basic research, I know there’s bipartisan support in this chamber,” the president said. “Members of both parties have told me so. Where we too often run onto the rocks is how to pay for these investments.”

Obama has opposed asking drivers to pay more at the pump to help pay for transportation projects, although infrastructure advocates believe he privately supports the proposal. 

The president stuck to his previous suggestion of using savings from tax reform to pay for transportation projects in Tuesday’s speech, however. 

“Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America,” he said. “Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.” 

Obama’s previous corporate tax reform proposals have gone nowhere on Capitol Hill, but he pitched them as a solution to a transportation funding shortfall that is estimated to be about $16 billion per year, as gas tax revenues have struggled to keep pace with more fuel efficient cars. 

The gas tax, which predates the development of the Interstate Highway System, has been the traditional source for transportation projects since its inception in the 1930s.

The tax, which has not been increased since 1993, brings in about $34 billion per year. The federal government typically spends about $50 billion per year on road and transit projects, and transportation advocates have maintained that the larger figure is only enough to maintain the current state of the U.S. infrastructure network. 

The current transportation funding bill, which authorizes the collection of the gas tax at its current rate, is scheduled to expire in May. 

Shuster said he was optimistic that lawmakers will be able to figure out another way to pay transportation projects this year. 

“I feel confident that we’re going to figure out how to get that funding stream so that we can do a longer-term bill, because I believe that both sides of the aisle, both sides of the Capitol, both ends of Pennsylvania Avenue, everybody’s committed to getting a funded bill that gives us that certainty that we need,” he said.