DALLAS - The chairman of the Senate Finance Committee threw more cold water on the idea of increasing the federal gasoline tax to support transportation funding in the next surface infrastructure bill at a hearing Thursday on revenue options.
Sen. Orrin Hatch, R-Utah, did not flatly reject an increase in the 18.4 cent per gallon federal gasoline tax, but he said the idea has little support in Congress or from President Obama.
"The administration has never included a gas tax increase in the transportation bills they've submitted and instead are looking for the revenues through international tax reform, which has all types of problems," he said.
"I don't think a massive increase in the gas tax could be enacted into law," Hatch said.
House leaders, including Rep. Paul Ryan, R-Wis., chairman of the tax-writing House Ways and Means Committee, have ruled out consideration of a gasoline tax increase to bring in the $90 billion or more of new revenue needed for a six-year transportation bill, Hatch said.
"We couldn't get a gasoline tax increase through the House even if we decided that was the answer," Hatch said. "They've been very clear and frank about that."
A variety of other revenue options will be considered, said Hatch, who did not express any preferences. "My hope is that we can focus on solutions that can actually work, that can actually be enacted into law to pay for highways," he said.
"We're going to go through every possible way to find the money," Hatch said. "It's not going to be easy, but we're going to solve this problem."
Hatch criticized a letter Senate Democrats sent to Senate Majority Leader Mitch McConnell, R-Ky., earlier this week asking that a multiyear transportation bill with increased funding be developed before the current extension of the Highway Trust Fund expires July 31.
"Any specific proposals or ideas on how to fund a long-term highway bill were noticeably absent from the letter," he said. "Instead, we were treated to a discourse on how previous Congresses had dealt with highway funding and how the current Senate leadership is, in the eyes of Senate Democrats, falling short."
Sen. Ron Wyden, D-Ore., the ranking minority member on the panel, said a program similar to the Build America Bond and a national infrastructure bank would help bring more private investments to transportation projects.
"We need to find new, creative ways to finance roads and bridges," Wyden said.
Former Transportation Secretary Ray LaHood told committee members that while BABs and the proposed Qualified Public Infrastructure Bonds would be helpful, they could not replace the revenues generated from the gasoline tax.
A gas tax increase of 10 cents per gallon would generate $15 billion a year, enough to wipe out the HTF's revenue gap between tax collections and expenditures, LaHood told the senators.
"The most straightforward way to generate the needed revenue for a long term transportation bill is to increase the gas tax, which has not seen a raise since 1993," he said.
LaHood urged the senators to provide enough revenue to expand federal transportation funding rather than leaving it at current levels as in the FY- 2016 transportation appropriations bill passed by the House.
"It is past time for Washington to step up and produce a long term transportation plan that is robust and sustainable, he said. "We must reject the Band-Aid and duct tape approach and go big and bold."
Collections from the gasoline and diesel taxes will total almost $40 billion in fiscal 2015, but revenues are expected to drop 2% a year through 2025 as vehicles become more fuel efficient, said Joseph Kile, assistant director of microeconomic studies at the Congressional Budget Office.
