AASHTO Journal, 13 March 2015
The American Road & Transportation Builders Association is urging Congress to hike gasoline and diesel user fees by 15 cents a gallon to fund a six-year, $401 billion highway, transit and freight projects authorization bill. And it pairs that proposal with one to generate rebates to most taxpayers to cover the higher fuel cost.
Under ARTBA’s “Getting Beyond Gridlock” plan, the fuel tax increase would stabilize Highway Trust Fund revenues long beyond the six years, since the permanently higher fuel fees would keep the fund from facing a sudden “cliff” of expiring revenue measures.
The infrastructure advocacy group says its proposal would let state departments of transportation count on a long-term funding stream to maintain current federal highway spending plus inflation, and the current core transit program. ARTBA also proposes investing $62 billion over six years in freight network improvements and $15 billion in transit capital projects that provide relief in highway congestion.
ARTBA President Pete Ruane urged lawmakers to avoid replenishing the trust fund with budget “gimmicks” and “one-off” revenue measures that would only prop up transportation programs for a short time. “That won’t resolve the structural damage that’s been done to the Highway Trust Fund,” Ruane said, “nor will it allow states to do the long-range capital planning that the nation needs.”
The average annual cost of its plan to drivers, ARTBA says, would be $88 in higher gasoline user fees and $682 to truckers, who would presumably pass on their higher costs to freight shipping customers. That would raise an extra $159 billion over six years, the group said in a one-page summary.
But to help sell the idea in a Congress where many leaders say their members will not support a fuel tax hike, ARTBA also proposes six years of annual tax rebates to 94 percent of taxpayers so that they would see no net tax increase. The proposed rebates would be $90 for single filers earning up to $100,000, and $180 for joint filer making up to $200,000.
And to cover the cost of those rebates, while still beefing up transportation spending, ARTBA’s plan would have Congress assess foreign earnings of U.S. corporations with a one-time, $103 billion repatriation transition tax.
ARTBA says besides providing long-term certainty, its plan would restore the “user pays” funding concept for federal highway and transit program revenue, after many years in which Congress pulled in unrelated revenues to cover Highway Trust Fund shortfalls.
This plan, said ARTBA, would “end general fund bailouts and budget gimmicks” that Congress has reached for in recent years, rather than increase dedicate transportation user fees.
The group also released a year-by-year estimate of how the proposal would work, and the economic assumptions behind its projections.