Shuster Rejects Fuel-Tax Hike to Fund Next Highway Bill

This story appears in the Feb. 10 print edition of Transport Topics.

WASHINGTON — After saying for a year that all options need to be “on the table,” House Transportation Committee Chairman Bill Shuster (R-Pa.) last week took higher fuel taxes off the menu of ways to pay for transportation.

Shuster, whose committee is set to write a new transportation funding bill this year, said he opposes an increase in federal fuel taxes, which fund highways and help subsidize public transit.

“I just don’t think that there’s the will out there with the American public or the Congress. Even our president has said that we’re not going to do that,” Shuster said at an infrastructure event here Feb. 4.

“Our economy’s not in good shape,” Shuster added. “I believe there are ways we can fill that hole in the trust fund. There’s a lot of . . . different ideas out there.”

Among ideas that he said are being discussed are leasing more off-shore oil-drilling rights, repatriating the profits American corporations are keeping overseas to avoid paying taxes and a tax on vehicle miles traveled.

Rep. Earl Blumenauer (D-Ore.) did not attend the event, but he told Transport Topics that Shuster is wrong about a lack of support for higher fuel taxes.

Blumenauer said that in December, when he introduced a bill to raise fuel taxes by 15 cents by 2016, he was joined by “the U.S. Chamber [of Commerce], the AFL-CIO and the head of their building trades and the head of the laborers union, the head of [the American Public Transportation Association].”

He added, “We had truckers and AAA specifically supporting it, contractors, environmentalists, engineers.”

The legislation also would replace fuel taxes with a more sustainable funding source by 2024, according to Blumenauer.

The same day Shuster spoke, the Congressional Budget Office reiterated its projection that by Oct. 1 — the start of fiscal 2015 — the Highway Trust Fund will be unable to meet its obligations.

Federal fuel taxes generate about $38 million annually, which has not covered transportation spending for years, so Congress has been making transfers from the general fund to the highway fund.

Blumenauer estimated Congress has put $100 billion into the highway fund in the past 10 years. He said he has asked House Ways

and Means Committee Chairman David Camp (R-Mich.) to hold hearings on long-term funding for transportation.

“Let’s have the flipping hearing,” said Blumenauer, a member of the committee. “Let’s start doing our job, and I think people will find there’s a lot of support from the people out there who have some public credibility and some political heft.”

Meanwhile, Shuster told the gathering that he hopes to produce a five- or six-year transportation reauthorization bill by summer to replace MAP-21, the current funding law that expires Sept. 30.

He also said a tax on vehicle miles traveled (VMT) could not be implemented in time for the new bill. But a VMT tax or new fuel taxes may be the only levies capable of generating long-term funding and a sum equal to the nation’s infrastructure problems.

The Federal Highway Administration has said it needs $20.5 billion every year between now and 2028 just to fix the nation’s bridges. Current spending is about $13 billion a year.

Last week’s infrastructure event was the first time that Shuster ruled out higher fuel taxes.

When he was campaigning to lead the committee in November 2012, Shuster told Transport Topics, “We’ve got to look at all the options,” including new fuel taxes. He reiterated that in January 2013, saying all options are “on the table” during a second TT interview after becoming chairman.

A month later, he told the American Association of State Highway and Transportation Officials that making the Highway Trust Fund sustainable was the biggest challenge Congress is facing. Rejecting higher fuel taxes, he said, was the “wrong way” to go.

Emil Frankel, former assistant secretary of transportation policy under President George W. Bush, told TT that by refusing to raise the fuel tax and ignoring possible substitutes, Congress is fraying the tie between highways and user fees.

“Policy happens as much by inaction as it does by action,” said Frankel, a visiting scholar at the Bipartisan Policy Center in Washington.

“I think we’re going to just kind of limp along here, extensions, short-term bills, transfers from the general fund . . . because I just don’t see them grappling seriously with the issue of sustainable funding, nor is the administration,” Frankel said.

He was not at the infrastructure event, but two speakers there — former Transportation Secretary Ray LaHood and former Pennsylvania Gov. Ed Rendell (D) — said Congress is incapable of passing a reauthorization bill in an election year. LaHood, a Republican, and Rendell are co-chairmen of Building America’s Future.

“The country is in a disaster when it comes to infrastructure,” LaHood said. “Drive around these lousy bridges and roads or [ride] the 50-year-old transit system.”

He wants the fuel tax increased 10 cents and indexed to inflation, although that was not the Obama administration’s position when he was secretary.

“If they’d indexed it in 1993, I don’t think we’d be having this discussion now,” he said.

The 18.4-cent gasoline tax and 24.4-cent diesel tax were last increased in 1993.

Rendell said Congress’ failure on transportation is part of a larger failure to invest in infrastructure, which he said is reducing our global competitiveness, stalling the economy and costing trucking jobs.

America is not, for instance, preparing its Atlantic seaports for the supersize cargo ships that will come from Asia through the widened Panama Canal and as a result, most will unload in Canada, Rendell said.

“The jobs that will be created are longshoremen’s jobs and trucking jobs, blue-collar jobs” he said. “We’re going to lose tens of thousands, maybe hundreds of thousands, of those jobs because we’re not ready.”