Debating a Gas Tax Hike

WASHINGTON — The top Republican on a House transportation panel yesterday warned Congress will never approve a proposal to raise the gas tax by as much as eight cents a year for five yeas to improve the nation’s infrastructure, and suggested federal bonds as a possible alternative.

“There’s a snowball’s chance in hell,” Rep. John Mica, R-Fla., the ranking minority member of the House Transportation and Infrastructure Committee, said at a hearing about the gas tax hike recommendation from a congressionally mandated transportation funding panel.

Although Mica is a Republican in a Congress controlled by the Democrats, both parties must work together for legislation to be approved.

The 12-member National Surface Transportation Policy and Revenue Study Commission — a panel created to assess the needs of the surface transportation system and how to finance them over the next 15 to 50 years — released its report earlier this week. The report is expected to frame the debate to reauthorize the current transportation funding law, which expires at the end of fiscal 2009.

One of the report’s more controversial recommendations is for Congress to increase the current 18.4 cents per gallon gas tax by five to eight cents per year for five years and to index the tax for inflation after the fifth year.

At hearing on the report, Mica said the gas tax is becoming a less reliable source of revenue to fund transportation improvements, as more fuel efficient and alternative fuel vehicles become more of the norm than the exception.

Instead of the tax increase, Mica suggested exploring the possibility of increased bonding by the federal government, where the Treasury Department or the Department of Transportation would issue transportation bonds that would be repaid by the current federal gas tax.

“One of the things that [the Bush administration] has not been good at supporting is bonding, taking the revenue stream we have now and leveraging it out,” Mica said, adding that it would allow projects to be built faster.

But committee chairman Rep. James L. Oberstar, D-Minn., who has previously supported raising the gas tax, said that demand for gasoline is going up, citing a recent report that said Americans used 700 million more gallons of gasoline in 2007 over 2006.

“It remains for us, in the public policy arena, in the executive branch, and the legislative branch, to summon up the political will to act upon this compendium of proposals in order to transform America’s transportation portfolio into a vibrant, sustainable engine of growth, underpinning and enhancing this greatest economy in the world,” he said.

The commission’s vice chairman, Jack Schenendorf, a transportation attorney with law firm Covington & Burling LLP and a former aide to the transportation committee, echoed Oberstar’s comments.

“We believe that the federal government must continue to be part of the solution both in terms of providing leadership and in terms of providing a fair share of the resources,” Schenendorf told the committee.

The recommendations in the report were supported by nine of the 12 members of the commission, the remaining three, including Transportation Secretary and commission chairman Mary Peters, signed off on a minority report that dissented from report’s findings.

Peters declined to appear before the committee, but did submit a written statement in which she reiterated her objections to raising the gas tax, including that the tax revenue is not spent on projects that best reduce congestion, but rather on Congressional pet projects.

Oberstar said that any action on the gas tax would come after Peters and President Bush are no longer in office.

“They won’t be here when we make those decisions,” he said.

However, one of the three commission dissenters who appeared before the committee — Rick Geddes a professor at Cornell University’s Department of Policy Analysis and Management — argued that variable-rate tolling the roads is the best way to fund the nation’s infrastructure because it “allows customers to face the full, true cost of using a particular road.”

“The fundamental problem facing much of our transportation system today is an imbalance between road capacity available and the demand for it,” Geddes said in written testimony. “The imbalance can only be corrected through proper pricing.”

But Rep. Peter DeFazio, D-Ore., chairman of the committee’s highway and transit subcommittee, said that pricing roads would reduce congestion by making the roads unaffordable for low-income users.

“You can’t choose what time you go to work, what are your alternatives as a consumer if there is not a viable mass transit option?” DeFazio said. “Quit your job, sell your house, move?”

Reprising some of the arguments he has had with Peters, DeFazio said that variable-rate tolling is a form of rationing. He argued that the policy would send low-income drivers on to free adjacent roads increasing congestion on them while upper income drivers use free flowing “Lexus lanes.”

“I just can’t see how this is some grand solution where people don’t have viable alternative that are comparable,” he told those at the hearing.

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