Senators Propose Gas Tax Increase for Highway Trust Fund Revenue

AASHTO Journal, 20 June 2014

A bipartisan proposal to raise the federal gas tax and help stabilize the Highway Trust Fund over the long term was introduced in the Senate this week. The plan was unveiled by Sen. Bob Corker (R-TN) and Sen. Chris Murphy (D-CT) the same week that the U.S. Department of Transportation updated its Highway Trust Fund ticker, showing the fund would become insolvent well before the expiration of current surface transportation bill MAP-21 at the end of September (see related AASHTO Journal story here).

Corker and Murphy’s proposal calls for a 12-cent federal gas tax increase (six cents each the next two years) while also indexing the tax to inflation to ensure HTF viability in the future. The federal gas tax has not been raised in more than 20 years, meaning that the tax is worth about 63 percent of what it was in 1993, according to a statement by Corker and Murphy.

Though the subject of a gas tax increase has been a touchy one in Washington in recent years, both Corker and Murphy said transportation infrastructure is vital for a healthy economy so strong investment and HTF certainty is necessary.

“Growing up in Tennessee as a conservative, I learned that if something was important enough to have, it was important enough to pay for. That’s how we’ve governed in the Volunteer State, which has resulted in the second best transportation system in the country without having one penny of road debt,” Corker said in a statement. “In Washington, far too often, we huff and puff about paying for proposals that are unpopular, yet throw future generations under the bus when public pressure mounts on popular proposals that have broad support. Congress should be embarrassed that it has played chicken with the Highway Trust Fund and allowed it to become one of the largest budgeting failures in the federal government. If Americans feel that having modern roads and bridges is important then Congress should have the courage to pay for it.”

“For too long, Congress has shied away from taking serious action to update our country’s aging infrastructure,” Murphy said. “We’re currently facing a transportation crisis that will only get worse if we don’t take bold action to fund the Highway Trust Fund. By modestly raising the federal gas tax, we can address a crippling economic liability for this country—the inability to finance long-term improvements to our crumbling national infrastructure. I know raising the gas tax isn’t an easy choice, but we’re not elected to make easy decisions — we’re elected to make the hard ones. This modest increase will pay dividends in the long run and I encourage my colleagues to get behind this bipartisan proposal.”

To offset the higher gas tax, Corker and Murphy propose in the plan to provide “net tax relief for American families and businesses,” suggesting a permanent extension of some tax provisions or a proposal to cut taxes by “at least the amount of revenue raised from the gas tax over the next decade.”

Additional details on the gas tax increase proposal is available here.

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