Bipartisan proposal would increase levy by 15 cents, use to fund infrastructure
A proposal to raise the federal gas tax put forward by Sen. Tom Carper and Ohio Republican Sen. George Voinovich found its way into a report issued last week by a special presidential commission charged with formulating ways to reduce the national debt.
The plan, as articulated in the Nov. 11 preliminary report from the National Commission on Fiscal Responsibility and Reform, would gradually increase the gas tax by 15 cents per gallon beginning in 2013, with the proceeds going toward shoring up funding for transportation and infrastructure projects nationwide.
The 15-cent increase outlined in the commission report represents only part of the gas tax hike proposed by Carper and Voinovich.
In a letter dated Nov. 5 Carper and Voinovich told commission co-chairs Erskine Bowles, who served as chief of staff in the Clinton White House, and Alan Simpson, a former Republican senator from Wyoming, that the gas tax should be increased by one cent per month over a period of 25 months. Of the total 25-cent increase, the senators suggested 10 cents should be temporarily used to reduce the federal spending deficit, while the other 15 cents should be used to fund transportation.
Currently, the federal gas tax stands at 18.4 cents per gallon. The last time it was increased was 1993, when it went up 4.3 cents.
In total, the senators said in their letter, the 25-cent tax hike would generate $200 billion in revenue over five years.
Of that, $117 billion would end up earmarked for transfer to the federal Highway Trust Fund, which Carper and Voinovich said is badly in need of funding.
In recent years, money has been diverted from the General Fund to keep the highway fund afloat, but Congressional Budget Office estimates say the highway fund will run in the red if changes aren’t made.
“This situation will force Congress to decide between two unacceptable solutions: additional transfers from the General Fund, which will lead to a higher deficit, or a sharp reduction in federal transportation funding for every state, which will create addition unemployment and continued deterioration of infrastructure,” read the letter from Carper and Voinovich.
The senators also said the additional transportation project funds would create 750,000 jobs nationwide.
In a separate letter to the commission, leaders of various trade and lobbying organization, including building and contracting groups, lodged their support for the plan.
It’s unclear how much support the gas tax plan will get in the new Congress, with Republicans now in charge of the House of Representatives.
And though the Carper/Voinovich gas tax proposal is a bipartisan effort, it’s worth noting that Voinovich, elected in 1998, announced his plans to retire when his term ends in January.
Addressing potential criticisms of a plan to raise a consumer tax in a time when unemployment is high and the economy is sluggish, Carper said in an email that boosting transportation funding would end up helping the job market and the economy.
“I'm proposing that we pay for these necessary improvements — and the jobs they would create — instead of passing on the check to our children and grandchildren. Maintaining a robust and self-sufficient transportation system will provide good paying jobs and strengthen Delaware's economy,” he said. “Ultimately we can't afford to do nothing unless we want our transportation system to crumble and our deficit to skyrocket out of control. This is a common sense proposal that will effectively address both problems.”
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