DALLAS — Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., have formed a bipartisan partnership to push for a 12 cent per gallon increase in federal gasoline and diesel taxes to support the rapidly depleting Highway Trust Fund.
The increase in the taxes, which are currently 18.4 cents per gallon for gasoline and 24.4 cents for diesel, would be phased in over two years, with the first 6 cents levied in 2015 and another 6 cents in 2016.
If the trust fund runs dry and no new highway are funded in fiscal 2015, the duo said, it could result in a $50 billion hole in states' 2015 transportation budgets and a $160 billion shortfall over the next decade if left unaddressed.
The bipartisan proposal was outlined by Murphy and Corker at a Wednesday morning news conference.
"By modestly raising the federal gas tax, we can address a crippling economic liability for this country — the inability to finance long-term improvements to our crumbling national infrastructure," said Murphy, a member of the Joint Economic Committee. "I know raising the gas tax isn't an easy choice, but we're not elected to make easy decisions — we're elected to make the hard ones."
Congress must show the political will to raise taxes needed to preserve the Highway Trust Fund, said Corker, a member of the Senate Banking Committee.
"In Washington, far too often, we huff and puff about paying for proposals that are unpopular, yet throw future generations under the bus when public pressure mounts on popular proposals that have broad support," he said. "Congress should be embarrassed that it has played chicken with the Highway Trust Fund and allowed it to become one of the largest budgeting failures in the federal government."
The highway fund, which has been bolstered with almost $60 billion of transfers from the general fund since 2008, is expected to be unable to meet reimbursement payments to states for highway projects by late July. The dedicated gasoline and diesel tax revenues are expected to be $18 billion less than expenditures from the fund in fiscal 2015 at the current rate.
The higher taxes would generate approximately $18 billion a year based on the Congressional Budget Office's calculations that each 1 cent of the gasoline tax generates $1.5 billion a year.
Corker and Murphy said the impact of the higher fuel taxes could be offset by extending some existing tax breaks set to expire soon. Extending the federal deduction for state sales taxes and other provides would provide up to $190 billion in tax relief over the next 10 years, they said.
The additional 12 cents of tax would be cover funding for projects under the current highway bill over the next 10 years and replace all of the buying power the federal gas tax has lost since it was last raised in 1993, Murphy and Corker said.
The taxes would be indexed to inflation after 2016.
Allowing the Highway Trust Fund to evaporate would put 600,000 jobs at risk, said Ed Rendell, former governor of Pennsylvania and co-chair of transportation advocacy group Building America's Future.
"This would be a major hit to America's economy and cannot be allowed to happen," Rendell said. "Instead of sitting on their hands as they watch America's roads and bridges further deteriorate, Sen. Murphy and Sen. Corker have the courage to step up and offer a real solution."
Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce, said the proposal will "generate a constructive conversation" on how to fund surface transportation projects.
"A well-designed, modern infrastructure enables the business activity that leads to economic growth, which is exactly why predictable, sustainable, growing sources of revenue are needed to support the federal Highway Trust Fund," she said.
A more stable funding source will provide states and local governments the money they need to repair aging roads, bridges, and transit systems, said James Corless, director of the advocacy group Transportation for America.
"The alternative is to allow our transportation system to crumble along with an economy hobbled by crapshoot commutes and clogged freight corridors," Corless said.
Other lawmakers also have proposed measures to either increase the gas tax or impose a refinery-based sales tax. Rep. Earl Blumenauer, D-Ore., has proposed a gas tax increase of 15 cents per gallon, phased in over three years. The per-gallon tax would remain at 33.4 cents, adjusted for inflation beginning in 2016 through 2025, when it would revert back to 2013 levels.
Rep. Peter DeFazio, D-Ore., last week proposed replacing the gasoline tax with a refinery-based sales tax on crude oil of $6.75 per barrel that would be indexed regularly to the inflation rated.
