Senators propose 12-cent gas tax increase

  • By JOAN LOWY
  • Thursday, June 19, 2014 10:29pm
  • News

WASHINGTON — Two senators unveiled a bipartisan plan Wednesday to raise federal gasoline and diesel taxes for the first time in more than two decades, pitching the proposal as a solution to Congress’ struggle to pay for highway and transit programs.

The plan offered by Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., would raise the 18.4 cents-a-gallon federal gas tax and 24.4 cents-a-gallon diesel tax each by 12 cents over the next two years, and then index the taxes to keep pace with inflation. The increase would be applied in two increments of 6 cents each.

The plan also calls for offsetting the tax increases with other tax cuts. Senators said that could be done by permanently extending six of 50 federal tax breaks that expired this year, but they indicated they would be open to other suggestions for offsets.

The plan was immediately embraced by industry and transportation advocacy groups seeking a long-term means to keep the federal Highway Trust Fund solvent. However, it would require a lot of heavy lifting from Congress in the politically charged atmosphere of an election year to pass such a plan before late August, when the trust fund is forecast to go broke.

Senate Finance Committee Chairman Ron Wyden, D-Ore., has indicated he’s looking for means to shore up the fund for about the next six months while working on a long-term plan. That would move debate on a gas tax increase or some other revenue-raising scheme until after the midterm elections in November.

Revenue from gas taxes and other transportation user fees that for decades hasn’t kept pace with promised federal transportation aid promised to states. People are driving less per capita and cars are more fuel efficient, keeping revenues fairly flat. At the same time, the cost of construction has increased, and the nation’s infrastructure is aging, creating greater demand for new and rebuilt roads and bridges.

The last time federal gas and diesel taxes were increased was in 1993 as part of plan to reduce the federal budget deficit. Republicans castigated Democrats for the tax increase, and it was a factor in the GOP takeover of the House and Senate the following year.

Since then, lawmakers have been reluctant to raise fuel taxes despite calls from several blue-ribbon commissions to do so.

“For too long, Congress has shied away from taking serious action to update our country’s aging infrastructure,” Murphy said in a statement. “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.”

Sen. Tom Carper, D-Delaware, who attempted to increase the gas tax increase in 2010, said he was glad to see the idea “gaining more bipartisan support.”

Since 2008, Congress has repeatedly dipped into the general treasury for money to keep the trust fund solvent, sometimes waiting until the government was the verge of slowing down payments to states. States have complained that the uncertainty over whether federal aid will be forthcoming has limited their ability to commit to larger projects that take years to plan and construct.

“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,” Corker said.

The six expired tax breaks identified by the senators as possible offsets for fuel tax increases are a research and development tax credit, certain expensing by small businesses, the state and local sales tax deduction, increasing employer-provided transit benefits to the same level as parking benefits, a deduction for spending by teachers on classroom supplies, and an increased deduction for land conservation and easement donations.

The anti-tax Club for Growth, which is influential with GOP conservatives, issued a statement opposing the plan. Congress should “devolve highway funding to the states and let them fund their own infrastructure needs,” said Chris Chocola, the group’s president.

More in News

A Homer Volunteer Fire Department emergency medical technician, left, assists a person who was involved in a boat capsizing, center, as they walk up the load-launch ramp on Wednesday, July 8, 2020, at the Homer Harbor in Homer, Alaska. The crew of the F/V Captain Cook helped rescue the person. The crew of the F/V Casino rescued the other two people who were aboard the 14-foot skiff when it capsized near the entrance of China Poot Bay. (Photo by Michael Armstrong/Homer News)
1 dead, 2 rescued after boat capsizes near China Poot Bay

A 14-foot skiff carrying three people overturned near Gull Island in the mouth of China Poot Bay.

The Kenai River and Skilak Lake are seen from the Hideout Trail in the Kenai National Wildlife Refuge on Sunday, July 5, 2020, on the Kenai Peninsula in Alaska. (Photo by Jeff Helminiak/Peninsula Clarion)
Public comment open on proposed refuge changes

State could get more power over regulation refuge

COVID-19. (Image CDC)
10 new COVID-19 cases on the Kenai Peninsula

Statewide, 49 new cases in total were identified: 40 resident cases and nine nonresident cases.

The entrance to the Kenai Peninsula Borough building in Soldotna is seen here on June 1. (Photo by Brian Mazurek/Peninsula Clarion)
Assembly overrides veto of hybrid election system

Members of the Kenai Peninsula Borough Assembly voted to override a mayoral… Continue reading

Parker Rose and Kendra Rose, members of the Sterling Horse and Livestock 4-H Club, are seen here with their miniature donkey on April 23, 2020. (Photo courtesy Cassy Rankin/Kenai Peninsula District 4-H)
Keeping cows and carrying on

4-H looks for alternative ways to host animal auction

The Swan Lake Fire can be seen from above on Monday, Aug. 26 on the Kenai Peninsula, Alaska. (Photo courtesy Alaska Wildland Fire Information)
State lifts burn suspension

Residents may now obtain permits for burn barrels as well as for small and large-scale brush fires.

A chart produced by the Alaska Department of Health and Social Services shows four risk factors in being infected by COVID-19. (Graph courtesy Alaska Department of Health and Social Services)
17th Alaskan dies of COVID-19

There were 23 new positive cases of COVID-19 announced Tuesday.

Noah and Eddie Land of Grace Acres Farm in Kasilof set out produce Tuesday, July 7, 2020, at the Farmers Fresh Market at Kenai Peninsula Food Bank. (Photo by Jeff Helminiak/Peninsula Clarion)
Freshness times 2

DoubleUp program helps seniors, families eat healthy

In this July 20, 2013 file photo, several thousand dipnetters converged onto the mouth of the Kenai River to catch a share of the late run of sockeye salmon headed into the river in Kenai, Alaska. (Peninsula Clarion file photo/Rashah McChesney)
Dipnetters banned from retaining kings

Dipnetting on the Kenai River opens Friday.

Most Read