A key House Republican on Monday released a sweeping proposal to upgrade the country’s infrastructure, but the plan isn’t likely to kick-start action in Congress on renovating highways and waterways as lawmakers remain deadlocked over federal gasoline taxes.
House Transportation Committee Chairman Bill Shuster, R-Pa., released draft legislation that would overhaul how infrastructure improvements are paid for and authorize grants to build and repair existing roads, bridges, highways and harbors.
The nation’s infrastructure is badly in need of repair. In its most recent analysis, the American Society of Civil Engineers (ASCE) says it would cost $4.5 trillion by 2025 to fix the country’s ailing roads, bridges, dams and other infrastructure. ASCE says degraded and outdated surface transportation systems represent a drag on U.S. economic growth that impacts every American family.
(Source: American Society of Civil Engineers)
“The cost of deteriorating infrastructure takes a toll on families’ disposable household income and impacts the quality and quantity of jobs in the U.S. economy,” according to ASCE’s Failure to Act. “From 2016 to 2025, each household will lose $3,400 each year in disposable income due to infrastructure deficiencies.”
One of the keys to overhauling the nation’s infrastructure is identifying the revenue needed to repave and repair interstates, rural roads and bridges.
Congress hasn’t raised the gas tax – currently at 18.4 cents per gallon – since 1993. As the principal funding source for spending on highways, the gas tax hasn’t kept up with demand as more fuel-efficient and hybrid vehicles have reduced tax receipts during the past quarter century.
To make up the shortfall, Congress has steered more than $135 billion during the past decade into the Highway Trust Fund, which finances federal highway and mass transit projects. Another $100 billion is needed during the next 10 years, Schuster said.
Shuster’s plan would increase the federal gasoline tax by 15 cents to 33.4 cents per gallon and increase the diesel fuel tax by 20 cents to 44.4 cents per gallon – and then eliminate both taxes in 2028. He wants a commission to recommend to Congress a gas tax replacement as a long-term funding source for the trust fund.
(Source: House Transportation and Infrastructure Committee)
President Donald Trump in February told senators he supported increasing the gas tax by 25 cents a gallon. But raising the gas tax has been a non-starter in Congress for two decades, and Republican leaders quickly rejected Trump’s trial balloon. In fact, the three top House GOP leaders (registration required) have donated hundreds of thousands of dollars to a ballot effort in California to roll back a recent 12 cent increase in that state’s gas tax.
After the 2016 election, overhauling the nation’s infrastructure was supposed to be the policy that Trump would use to unite Republicans and Democrats on Capitol Hill. Instead the issue stalled amid rising partisan tensions overall and the lack of consensus on what to do with the gas tax.
Shuster, who isn’t seeking re-election this year, wants to break that logjam by replacing the gas tax with a per-mile user fee. His plan would create a national, voluntary pilot program to tax drivers based on the number of miles driven, not the amount of gasoline purchased.
Some states are already testing a road-usage tax. Oregon created its OReGO program in 2015, charging volunteers 1.7 cents for every mile driven on public roads and offering rebates for the state’s fuel taxes. Earlier this year, 140 drivers in states along the East Coast’s I-95 corridor participated in a project that tracked their mileage with cellphone GPS signals and E-ZPass accounts.
Still, questions remain about mileage-based taxes. Some worry about allowing the government to effectively track their every movement while driving. Even those who like the idea have expressed concern that it could eventually lead to double-taxation – states enacting the mileage-driven fee and a gas tax. Also, taxing by mile driven would seemingly be unfair to rural drivers, who necessarily travel greater distances than drivers in urban or suburban areas.
Congressional Republicans have expressed interest in the mileage-driven tax structure as a replacement for the gas tax. House Speaker Paul Ryan, R-Wis., praised the idea earlier this summer, saying he thought the privacy issues were real but could be worked out satisfactorily.
Schuster doesn’t expect his plan to be taken up by Congress this year. But he hopes it will serve as a road map for future lawmakers to address repairing and modernizing the country’s infrastructure
“The 2016 presidential campaign shined a spotlight on America’s crumbling infrastructure,” Shuster said in a statement. “Since election day, the American people have waited for action by their federal elected representatives, and I am just as frustrated as they are that we have yet to seriously consider a responsible, thoughtful proposal. That is why I have released a discussion draft that … is meant to reignite discussions amongst my colleagues, and I urge all Members to be open-minded and willing to work together in considering real solutions that will give America the modern-day infrastructure it needs.”