Day by day, the May 31 expiration date for the stopgap federal highway and transit funding law is getting closer. What worries construction executives and state transportation officials is that Congress has shown no signs of agreement on finding the tens of billions of dollars needed to fund a new multiyear bill.
Seeking to crack the deadlock,the American Road and Transportation Builders Association on March 12 proposed boosting the federal gasoline and diesel taxes by 15¢ per gallon. To offset the financial hit to motorists, it calls for a $90 annual rebate. The federal gas tax now is 18.4¢ and the diesel levy is 24.4¢; those rates took effect in October 1993.
But ARTBA's proposal will be a tough sell in the Republican-controlled Congress. A pivotal figure, House Ways and Means Committee Chairman Paul Ryan (R-Wis.), in January ruled out a gas-tax increase. A Ways and Means spokesman said via email on March 12 that Ryan's position "has not changed." A few congressional lawmakers have proposed gas-tax increases, but those plans have gained little, if any, momentum.
Still, Pete Ruane, ARTBA president and CEO, told reporters his group has discussed its proposal with Senate and House legislators and aides and "found that they are quite interested in this idea, and very open-minded." He adds that ARTBA is "very encouraged by the reception we got to this idea" in the days leading up to its announcement.
ARTBA also has talked about the proposal with transportation, construction and other groups, and the reaction has been "nothing but huzzahs," Ruane says. "It's seen as a way to further the discussions, further the debate."
Brian Turmail, an Associated General Contractors of America spokesman, says, "Any option that identifies real and realizable sources of revenue to address the Highway Trust Fund shortfall ought to be on the table, ought to be part of the conversation."
Pam Whitted, National Stone, Sand and Gravel Association senior vice president for government and regulatory affairs, says, "It's an interesting proposal. We want to take a look at it."
ARTBA estimates that the fuels-tax increase would raise $159.2 billion over six years. Adding the Highway Trust Fund's currently projected inflow brings the grand total to $400.9 billion—a 66% boost compared with no tax hike.
The rebate would apply to individual taxpayers with adjusted gross incomes of $100,000 a year or less and joint filers with incomes of up to $200,000. Truckers and others who pay diesel taxes would not be eligible for rebates.
To keep the rebate plan's impact on the federal deficit neutral, ARTBA suggests repatriating, and taxing, U.S. companies' foreign income. The Obama administration proposed a similar revenue raiser to help fund its $478-billion, six-year transportation bill, but that "pay-for" has yet to win wide support.