House Subcommittee Explores Long-Term Infrastructure Pay Fors

The House Subcommittee on Highways and Transit capped off a series of Congressional hearings on infrastructure March 7, this time exploring long-term funding options for infrastructure.

The House Subcommittee on Highways and Transit capped off a series of Congressional hearings on infrastructure March 7, this time exploring long-term funding options for infrastructure. That same afternoon, Senate Democrats proposed undoing some of the tax cuts signed into law in December to pay for infrastructure. 

Lawmakers from both sides of the aisle, including House T&I Committee Chairman Bill Shuster and Ranking Member Peter DeFazio (D-Ore.), expressed strong support for raising the motor fuels taxes during the hearing citing it as the easiest and most transparent method for collecting infrastructure revenues.

Of importance to NATSO members, subcommittee members almost universally rejected the concept of tolling, saying the American people resoundingly reject tolls. Although public private partnerships were discussed, no one raised the concept of commercial rest areas as a means of paying for infrastructure.  

Lawmakers also touched on the need for users of electric vehicles to contribute their fair share to the Highway Trust Fund, including the need to explore the best way to collect a user fee from EV drivers. In general, subcommittee members and witnesses at the hearing acknowledged that vehicle miles traveled (VMT) programs are not ready for implementation – and that increasing the fuel tax will serve as a “bridge” to get us there.

“The easiest [idea] for us to all understand, not that it’s easy to pass or increase, is what we pay at the pump and we haven’t done it for 25 years,” Rep. Shuster said. “[Twenty four] states have done it and there’s been no political price to pay. … I believe we will pay a political price if the Trust Fund runs out. … I for one think it’s time to do it.”

The hearing marked the third in recent days – including one by the full T&I Committee on March 6 and a hearing held by the Senate Environment and Public Works Committee March 1 – to kick off discussions of the Trump Administration’s infrastructure proposal put forth in mid-February.

NATSO submitted a joint statement for the record along with the National League of Cities for each of the hearings detailing the organizations’ strong opposition to commercial rest areas and their negative effects on consumers, businesses and small towns and local communities.

Although specific mention of commerical rest areas did not come up March 7, just one day earlier, lawmakers questioned Transportation Secretary Elaine Chao about the concept of asset recycling,  which is the lease of public assets to generate revenue. Such models could lead to commercial rest areas and tolling.

The afternoon of March 7 Senate Democrats unveiled a plan that would return the top individual tax rate to 39.6 percent, set the corporate tax rate at 25 percent, go back to 2017 law for the Alternative Minimum Tax, undo the exemption increase for the estate tax and end the beneficial tax treatment of carried interest.

With Republicans in control of Congress, the plan is largely considered to be a political marker for the mid-term elections.

During the March 7 subcommittee hearing, Rep. DeFazio admonished elected officials who are unwilling to vote for a fuel tax increase calling them “gutless” and said that he would “stand next to the President” if he supported a gas tax increase. (Secretary Chao on March 6 declined to confirm reports that the President proposed a 25-cent fuel tax increase during a meeting with lawmakers several weeks ago citing the privilege of private conversations between the President and Cabinet Members).

Many lawmakers have been hesitant to increase a motor fuels taxes increase insisting there is a lack of public support. Rep. Shuster and Rep. DeFazio rebuffed that idea, arguing that infrastructure funding is a bipartisan issue and that of those lawmakers who have supported a fuel tax increase in their states, “nobody has lost their election.”

Rep. DeFazio last year introduced “A Penny for Progress,” which would authorize the U.S. Department of Treasury to sell 30-year Invest in America Bonds annually through 2030 that would generate nearly $500 billion in additional revenues for the Highway Trust Fund that must be put toward authorized highway and transportation projects.

American Trucking Associations (ATA) President and CEO Chris Spear testified March 7 that congestion costs the trucking industry $63.4 billion — representing a 9 percent tax on the trucking industry. Americans lose $1,500 a year, he said, in car repairs and sitting in traffic.

ATA urged lawmakers to support its Build America Fund, which Spear said would generate $340 billion over 10 years.

“These are the costs of doing nothing,” Spear testified, adding that the Build America Fund puts “real money on the table.”

The American Trucking Associations’ Build America Fund would be supported with a federal fuel usage fee built into the price of wholesale transportation fuels collected at the terminal rack, phased in at a nickel per year over four years. The fee would be indexed to inflation and improvements in fuel efficiency, with a 5 percent annual cap.

The U.S. Chamber of Commerce has proposed a 25-cent per gallon gas tax increase. Testifying on behalf of the Chamber, Ed Mortimer, Executive Director, Transportation and Infrastructure, for the Chamber said that a 25-cent increase equates to $9 a month or $104 a year for Americans.


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