Two New Highway Trust Fund Proposals
June 20, 2014
Two recent federal transportation proposals attempt to identify sustainable revenue sources as the Highway Trust Fund (HTF) nears insolvency later this summer and as the U.S. Congress considers a new transportation reauthorization package to replace the Moving Ahead for Progress in the 21st Century (MAP-21) Act, which expires September 30, 2014.
The Repeal and Rebuild Act of 2014 was introduced in the U.S. House of Representatives (summarized here) on June 11, 2014. It would repeal both the federal gasoline tax of 18.3 cents per gallon and the federal truck tire excise tax, replacing both with an increase of the federal tax on oil to $6.75 per barrel. Significantly, the Act would index the per-barrel tax and the existing diesel tax both to inflation and to improvements in vehicle fuel economy. This bill would raise an estimated $104 billion in additional revenue over ten years into the HTF.
On June 18, 2014, a bipartisan transportation funding proposal was announced in the U.S. Senate. The Highway Funding and Tax Reduction proposal would increase the federal gas and diesel tax by 12 cents each and index them both to inflation. This increase would be phased in over the next two years in equal six-cent increments. The proposal argues that an increase in gas and diesel tax revenues should be offset to provide relief for taxpayers, and it offers the option of permanently extending various tax breaks identified in the Tax Extenders Act of 2013.
GO TO 2040 calls for robust, sustainable investment in the transportation system. While the plan supports increasing the federal gas tax and indexing it to inflation, it also recognizes the need to pursue a long-term replacement for the gas tax as vehicle technologies continue to evolve.
CMAP will monitor these and other bills related to federal transportation policy and will continue to advocate for the agency's adopted reauthorization principles and federal agenda.