This year's battle in Congress over highway funding is shaping up to pit a hike in the fuel tax vs. instituting a vehicle-miles tax

Transpo chair Shuster contends there’s no political will for hiking the fuel tax this year

Feb. 7, 2014
Key lawmaker instead favors vehicle-miles tax plus other measures to fund a longer-term highway bill

With less than eight months left on the clock until the next highway and transit appropriations bill must be approved or at least extended, a key Capitol Hill lawmaker has publicly declared that hiking the fuel tax should be off the table.

In lieu of that funding mechanism, House Transportation & Infrastructure Committee Chairman Rep. Bill Shuster (R-PA ) said he would push for a vehicle-miles tax as well as higher taxes on energy exploration and “bringing back” corporate profits earned overseas to pay for a highway bill that would run for at least five if not six years.

“Economically, it is not the time [for a fuel-tax hike],” Shuster said this week at an infrastructure event sponsored by the Bloomberg Government news outlet.

“I just don’t believe the American people have the will out there, in the public or in Congress, even our President has said we’re not going to do that,” he said, per a NATSO report on the meeting. “We’ve got to figure out a different way at this point in time.”

Shuster also remarked that in speaking with Members of the House Ways & Means Committee as well as its Chairman Rep. Dave Camp (R-MI) he discussed “things that we can do to save money in other areas and invest the money in the transportation system,” noted a post by Politico.com.

Suggesting that a fuel-tax hike would pass—albeit through political courage if not secrecy-- Politico.com has reported that former Governor of Pennsylvania Ed Rendell (D) contends that such a measure would garner over 400 House votes if  a secret balloting was called so Congressmen wouldn't be hurt politically if they voted to raise the fuel tax.

Back in December, Rep. Earl Blumenauer (D-OR) introduced a bill (H.R. 3636) that would hike the federal fuel tax by 15 cents-- as was recommended by the Simpson-Bowles National Commission on Fiscal Responsibility and Reform-- and index the tax to inflation to ensure it would remain a “sustainable” source of revenue.

The very next day after Blumenauer’s measure was introduced, trucking’s biggest lobby, the American Trucking Assns. (ATA) came out loud and clear in support of the bill.

“ATA is very pleased to support Congressman Blumenauer's proposal to increase and index the federal fuel tax," said the group’s president & CEO Bill Graves. "Underinvestment in highways is an enormous burden on the trucking industry, raising the cost of moving freight and undermining the reliability of a logistics system that is critical to our nation's competitiveness. 

“The additional investment in highway projects made possible by this new revenue will significantly improve the safety, reliability and efficiency of the trucking industry, to the benefit of all Americans," Graves added.

On the other hand, a vehicle-miles tax has never gotten anywhere on the federal level before now “because of objections to the concept of tracking how many miles people drive to assess and collect the levy,” noted a Bloomberg report on its infrastructure event.

In any event, untold hours of politicking over the highway bill will have to take place in a very short time. According to the Federal Highway Administration, at the end of November the highway balance in the trust fund was $9.22 billion— or 24% lower year-over-year.

Meanwhile, the Congressional Budget Office figures that balance will amount to just $1 billion at the end of September. That would be a mere fourth of what the Dept. of Transportation has pegged as needed to pay highway bills as they become due.

Despite the Inside-the-Beltway dithering, there is movement afoot on the state level to hike fuel taxes specifically to better fund highway projects.

For example, relates a post by Bill Spence of Idaho’s Lewiston Tribune Online, the Idaho Trucking Assn. just yesterday got a bill introduced in the state’s House Transportation & Defense Committee that would raise Idaho’s tax by six cents, to 31 cents per gallon.

Per the news report, the measure would produce about $53 a year in new revenue by 2016, which would help lower the the state's estimated yearly transportation-funding shortfall of $262 million. The proposal calls for phasing in the hike over three years, two cents each year.

“I believe it's time for us to meaningfully address the infrastructure needs of this state,” trucking lobbyist Skip Smyser, who is a former chairman of the Senate Transportation Committee, was quoted as saying.

Truck transportation is the only option that 80% of Idaho communities have for shipping or receiving commodities, Smyser noted.

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