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Voinovich, Carper Float Fuel Tax Hike Voinovich, Carper Float Fuel Tax Hike

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TAXATION

Voinovich, Carper Float Fuel Tax Hike

Updated at 11:24 a.m. on November 8.

In the face of staunch opposition from Republican leaders, Sens. Tom Carper, D-Del., and George Voinovich, R-Ohio, are proposing a fuel tax increase to address two looming fiscal problems -- a burgeoning budget deficit and a shrinking highway trust fund.

 

In a letter sent Friday to the bipartisan National Commission on Fiscal Responsibility and Reform, Carper and Voinovich proposed a 25-cent-per-gallon increase in the fuel tax, to be gradually rolled out over the next three years. The two senators say the levy would raise $200 billion over five years. Under the plan, $117 billion (or 15 cents per gallon) would be permanently dedicated to the highway fund, and $83 billion (or 10 cents per gallon) would be directed toward deficit reduction.

The proposal is well timed (and well placed) in the sense that the debt commission is scheduled to release a report in December that will be closely watched for how it proposes to shrink the country’s deficit. Some analysts are expecting recommendations for a federal sales tax, and transportation lobbyists are waiting to see how the commission chooses to address the shrinking highway fund. Simple maintenance of highways cost taxpayers $34.5 billion in 2008 and 2009 over and above the money raised from the current gas tax, Carper and Voinovich said in their letter.

The fuel tax proposal is not likely to go anywhere in Congress. Rep. John Mica, R-Fla., who will chair the House Transportation and Infrastructure Committee next year, is among the latest of Republicans to put the brakes on talk of a fuel tax increase, or any tax increase, for that matter.

 

Carper and Voinovich have the backing of industry leaders who stand to benefit from a bigger investment in highway infrastructure. Representatives from almost every corner of the transportation community -- from the Laborers International Union of North America to the American Road and Transportation Builders Association to America Bikes -- sent a separate letter to the debt commission Friday urging support of Carper and Voinovich’s proposal.

Infrastructure investment is one area where President Obama feels Republicans and Democrats can work together to reach agreement, if they can ever get around to talking to one another. A long-term highway funding reauthorization is several years overdue, and surface transportation projects are a surefire way to get people back to work fast.

But it won’t happen with a fuel tax increase, at least as long as Mica is in charge. Mica wants to raise the $300 billion plus needed to revamp the highway system by streamlining current transportation spending and capitalizing on public-private partnerships. In doing so, Mica could upset the time-honored balance of power among congressional funding panels and the various jurisdictions within the Transportation Department, leading to some bruised egos and along the way and perhaps a roadblock or two.

CORRECTION: The original version of this report misidentified Carper as a Republican.

 

Amy Harder contributed contributed to this article.

This article appears in the November 8, 2010 edition of National Journal Daily PM Update.

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