DALLAS — Federal gasoline and diesel taxes would rise by 16 cents per gallon over the next four years and then be indexed regularly to inflation under legislation Sen. Tom Carper, D-Del., introduced before the Senate left for its summer recess.
The higher rates would generate an additional $220 billion for the chronically insolvent Highway Trust Fund over 10 years, Carper said.
"The trust fund we use to pay for our roads, highways, bridges, and transit systems has been broken and has needed fixing since 2008, but Congress can't seem to get the job done," he said on Thursday.
"Rather than lurching from crisis to crisis, increasing country's debt, and borrowing more money from foreign governments to pay for our transportation system, I say it's time to do what's right," Carper said.
Carper's proposed the TRAFFIC Relief Act, S. 1994, which would compensate for the higher taxes by extending, expanding, and making permanent federal earned income and child tax credits. The earned income tax credit would be expanded to childless workers and the child tax credit would be indexed to inflation.
The current three-month HTF extension, set to expire Oct. 29, required an $8.1 billion general revenue transfer, sufficient to keep federal reimbursements to state transportation project flowing through mid-December.
The six-year transportation bill passed late last month by the Senate would use $45 billion of revenue offsets for a transfer needed cover the predicted HTF shortfall in the first three years.
Carper said during the Senate debate last week on the multiyear bill that he would try to include a gasoline tax increase as a part of the next multiyear highway bill if there is a conference committee with the House to develop a compromise measure. He has proposed similar gas tax increases last year and in 2010.
Gasoline taxes and other federal levies dedicated to transportation funding each year total about $40 billion, while expenditures from the fund in fiscal 2015 are expected to be $53.7 billion.
The 16 cent per gallon fuel tax increase, which would raise the gasoline tax by 87% and the diesel tax by 66%, would restore the purchasing power lost since those taxes were last increased in 1993. It would also allow for a significant increase in infrastructure investments, Carper said.
Congress has transferred almost $73 billion of general revenues into the HTF over the past seven years to support transportation expenditures that exceeded dedicated revenues, he said.
"At a time when gas prices are some of the lowest we've seen in recent memory, we should be willing to make the hard choice to raise the federal gas tax," Carper said. "By restoring the purchasing power of the gas tax, we can finally start the important work of rebuilding and expanding America's roads, highways, bridges, and transit systems."
Rep. Earl Blumenauer, D-Ore., filed H.R. 680 earlier this year to raise the gas tax by 15 cents over three years.
The proposed fuel tax increases appear to have little chance of gaining congressional approval. A higher gas tax has been ruled out by Senate Majority Leader Mitch McConnell, R-Ky., and Republican leaders in the House, including Rep. Paul Ryan, R-Wis., chairman of the Ways and Means Committee, Rep. Bill Shuster, R-Pa., chairman of the Transportation and Infrastructure Committee, and Majority Leader Kevin McCarthy, R-Calif.
Meeting expenditures from the HTF solely with fuels taxes would require a 10 cent per gallon increase in the gasoline tax beginning in fiscal 2016, the Congressional Budget Office said in June.
