U.S. Chamber Executive: Raise Gas Tax For Roads

The federal government should spend more money on highways, and the best way to do that in the short term is by raising the gas tax, the U.S. Chamber of Commerce says.

Janet Kavinoky, the U.S. Chamber’s executive director for transportation and infrastructure, told the Arkansas State Chamber of Commerce and Associated Industries of Arkansas Thursday that her national group wants a tax that the federal government can collect, that’s transportation related, that’s sustainably structured, that will match ongoing revenue to ongoing expenditures, and that will fill the gap between transportation costs and expenses.

The Highway Trust Fund faces insolvency by August because of increasing expenses and the stagnant motor fuels tax. MAP-21, the bill that authorizes transportation spending, is due to expire July 31.

Raising the motor fuels tax, which has remained the same at the federal level since 1993, is the easiest way to do that for now, she said. She said most vehicles are still powered by gasoline and diesel, and collecting the motor fuels tax is easy because the federal government only has to deal with eight or nine payers.

Kavinoky suggested raising the tax by a penny a month for a year and then indexing it to inflation. Meanwhile, plans should be made for future revenues based on changing driving patterns, alternative fuel vehicles, and the EPA’s coming stricter fuel mileage standards.

Kavinoky said that, ideally, lawmakers would be discussing how to increase transportation funding. Instead, they are talking merely about how to fill the gap between the current $35 billion coming into the Highway Trust Fund and the $50 billion going out. Also, instead of seeking new revenues, Congress is looking for offsets and is considering tactics that will not raise enough money, such as repatriating overseas profits.

“We are in this repeated cycle of not dealing with the long-term question of where do we find funding,” she said.

She said that members of Congress often privately agree that raising the motor fuels tax is the best way to increase transportation funding, but they are afraid doing so would get them voted out of office.

She said that efforts to increase transportation funding have been opposed by conservative, anti-tax groups that say transportation dollars can be found by reducing waste and ending funding for mass transit. Her group supports spending for transit.

“We’re actually fighting the right,” she said. “We’re fighting the right that is able to raise a lot of money.”

Kavinoky noted that the Senate Environment and Public Works Committee on Wednesday passed the DRIVE Act, which would be the federal government’s first six-year transportation plan since 1991. However, any transportation bill would also have to go through other Senate committees, and the House Transportation and Infrastructure Committee has announced that it doesn’t even plan to consider a transportation bill in July. Despite the fact that the current transportation bill expires July 31, it instead plans to work on aviation.