Senate plan would cost truck owners $135 million more a year

The Senate Finance Committee is scheduled to vote June 26 on a short-term fix for the highway trust fund that includes a provision to raise the cap on the heavy vehicle use tax (HVUT). Chairman Ron Wyden’s (D-OR) proposed Preserving America’s Transit and Highway’s (PATH) Act would replace the current cap of $550 on vehicles over 75,000 lbs. gross vehicle weight with a $1,100 cap on vehicles over 97,000 lbs. GVW. The higher cap would take effect for highway vehicles used after June 30, 2015.

The increase in the HVUT cap would raise an estimated $1.35 billion over 10 years, according to the Joint Committee on Taxation (JCT). The entire revenue plan, which includes several other tax changes not related to transportation, would raise just over $9 billion over 10 years, JCT said. The Dept. of Transportation projects that the trust fund will run out of cash in early September.

The annual HVUT is $100 plus $22 for every 1,000 lbs. in excess of 55,000 lbs. of gross vehicle weight, capped at $550 for vehicles over 75,000 lbs. Federal weight standards limit the interstate highway system to vehicles of 80,000 lbs. or less, although states may allow heavier vehicles to use roads outside the interstate highway system or on the interstates under varying exceptions.

A summary of Wyden’s proposal states that the provision “does not alter in any way current weight limits or safety regulations. It merely aligns the tax treatment with the current reality on the roads.”

According to JCT estimates, the higher HVUT revenue would be the single largest piece of the overall package for the first couple of fiscal years in the 10-year plan. Beginning in fiscal 2017, however, other revenue raisers would be larger. The single largest piece of the $9 billion plan is closing an estate-planning loophole involving inherited Individual Retirement Accounts and 401(k)s. That provision would raise $3.7 billion over 10 years.

The American Trucking Assns. said Wednesday that it was evaluating Sen. Wyden’s proposal to ensure the short-term solvency of the highway trust fund. “We appreciate the senator’s leadership on this critical issue and urge Congress and the administration to guarantee the trust fund’s solvency in the near term, and work together to set the course for long-term, reliable funding,” ATA said in a prepared statement.

At a leadership meeting in May, ATA backed a menu of options to fix the trust fund, but none of those options involved more revenue from the HVUT. “While ATA supports numerous funding options, an increase in the fuel tax is well known to be the fairest, most reliable and efficient method of raising money for infrastructure investment,” ATA said on Wednesday.

In recent weeks, several ideas have been floated to fix the trust fund on a longer-term basis, including a plan announced by Sens. Chris Murphy (D-CT) and Bob Corker (R-TN) to increase the federal fuel taxes by 12 cents over two years and then index them to inflation thereafter. Similarly, the Committee for a Responsible Federal Budget last week offered a menu of possible revenue increases and spending cuts.

In a newly released analysis, however, Fitch Ratings argued that raising fuel taxes alone would not be sufficient and that other mechanisms would be needed – especially tolling. It bears noting that Fitch is in the business of rating bonds, such as those that might be backed by toll receipts.

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