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What to Do With the Highway Trust Fund? What to Do With the Highway Trust Fund?

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What to Do With the Highway Trust Fund?

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Committee members are weighing the first gas-tax hike in 20 years to replenish the dwindling highway fund.(AP Photo/Reed Saxon, file)

Any discussion of the surface-transportation bill in recent years has focused on the Highway Trust Fund, and that dynamic shows no signs of changing anytime soon.

“That’s the 800-pound elephant—gorilla, whatever you want to call it—and everybody knows it,” said Pete Ruane, president of the American Road & Transportation Builders Association. “They’re looking at ways to solve it, and you’ve got to give them credit for it.”

 

The 2012 highway bill, known as the Moving Ahead for Progress in the 21st Century Act, or MAP 21, authorized $105 billion through fiscal 2014. The two-year measure was a compromise—highway legislation usually covers five years—passed amid political tumult to prevent the job losses and other problems caused when projects grind to a halt.

Now, lawmakers are starting to look to the next bill, but challenges are already mounting.

The Highway Trust Fund, which pays for most surface-transportation work and is funded through a fuel tax, has been dwindling, mostly because of the rise of fuel-efficient vehicles and the slow economy, according to the Congressional Research Service. The 18.4-cent-per-gallon rate has been static since 1993.

 

Whether to raise that tax, which many in the industry refer to as a “user fee,” is the subject of debate on the House Transportation and Infrastructure Committee and beyond. Lawmakers on the committee, including Republicans, speak favorably of the idea, but the political implications are considerable. Ever since the rise of the tea party and the GOP takeover of the House, the notion of raising taxes has been electrified. But if lawmakers fail to increase revenue to the fund, they will have to seek money from the government’s general fund, an option even less likely to win support.

The traditional five-year bill gives states time to undertake the projects laid out in legislation and gives the industry time to plan. But the declining Highway Trust Fund has made a multiyear bill difficult, prompting some lawmakers, including at least one Republican, to call for an increase in the so-called gas tax.

“We need a five-year bill,” said Rep. Don Young, R-Alaska, who sits on the committee. “We need a plan on transportation. We’ve got to raise the money. [Money] doesn’t come out of the sky. There is no magic wand. There is, in fact, a responsibility for users to pay. And I tried to get a 5-cent increase and got shut down.” Young chaired the committee from 2001-2007 and failed to clear a gas tax in 2004.

Other Republicans on the panel stop short of calling for a gas-tax increase, and many won’t say whether they support one. But some speak favorably of the idea, noting that industry groups that might ordinarily oppose such a measure have endorsed it.

 

“I think people are impressed on the committee and in Congress when the American Trucking Associations, whose interest is obviously to advance the interests of the trucking industry, comes in and testifies in favor of raising taxes on its members,” said Rep. Tom Petri, R-Wis., chairman of the Highways and Transit Subcommittee.

“Why would they do that? Their members are in the transportation business and they drive trucks over roads, and they want well maintained and adequate infrastructure so they can operate efficiently.”

Chairman Bill Shuster, R-Pa., suggested the possibility of bipartisan support on the committee to keep the trust fund flush, but he topped short of explaining how members could achieve that goal.

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“I get the sense, talking to members of the committee, that the one issue when it comes to revenues that brings Republicans and Democrats together are transportation issues. People understand the need to have a trust fund,” Shuster said at an event earlier this month.

Aides to Shuster say the only way the gas tax could be raised is through a much larger tax reform bill. Because a tax-reform bill would be an ambitious effort, a gas-tax hike would likely not be available for the next surface-transportation reauthorization at the end of 2014. In the meantime, Shuster hopes to squeeze enough money out of government streamlining to let the next highway bill go “as long as possible,” according to one aide. But the odds of finding enough revenue to go a full five years are slim.

Some outside groups have praised Shuster for trying to create an environment where bipartisan agreement can take hold.

“The most positive sign is the fact that the leadership is considering all the options,” ARTBA’s Ruane said. “They’re doing their homework, but there are among themselves—the staff and the leadership—all kinds of conversations going on. They’re not blind to it.”

Work on drafting the bill is slated to begin later this year, with staff digging in this fall and lawmakers beginning their work sometime next year. Petri pointed to hearings earlier this year on the state of the highway fund as evidence that the process is already starting, and Shuster has he would like to move a bill through regular order.

“My goal is to have a successful surface-transportation bill, one that does a lot of important things—and that probably means that it needs to be bipartisan. So I’m constantly trying to find the common ground,” Shuster said. “And with transportation, there’s a lot of common ground.”

Fawn Johnson and Amy Harder contributed contributed to this article.

This article appears in the July 25, 2013 edition of NJ Daily.

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