Higher Gas Tax for Infrastructure Pushed by Key GOP Lawmaker

(Bloomberg) -- The Republican lawmaker central to passing an infrastructure bill said the key may be getting his GOP colleagues to set aside years of opposition and embrace raising the tax on gasoline.

Representative Bill Shuster of Pennsylvania, chairman of the House Committee on Transportation and Infrastructure, said he urged his fellow Republicans at their legislative retreat to consider raising the gas tax to bolster the U.S. highway system, arguing that it’s a user fee that Americans are willing to pay.

He called the tax, which is 18.4 cents-per-gallon and hasn’t be raised since 1993, “the elephant in the room” in the infrastructure debate and said in a Bloomberg TV interview that a 15-cent hike might be appropriate. Any increase still faces steep resistance in his party, he said.

“Nobody wants to raise any taxes but this is something that’s understandable and efficient,” Shuster said Thursday at the Greenbrier resort in West Virginia, where Republicans are meeting. “The understandable part is that if you pay money at the pump, it goes into the Highway Trust Fund so it’s not going to Washington in the end. One hundred percent of it goes to fund rebuilding highways and bridges and road systems in this country. I think the American people understand that.”

President Donald Trump is urging Congress to pass bipartisan legislation to upgrade the nation’s roads, airports and ports. The administration has proposed contributing at least $200 billion in federal funds over 10 years to spur spending by states, localities and the private sector for a total investment of $1.5 trillion. However he hasn’t detailed how he wants to pay for it.

“To be fiscally responsible and to attract Democrats we have to deal with the shortfall in the Highway Trust Fund, which is projected to run out of money in 2020,” Shuster said. “It’s critical that it’s a bipartisan bill.”

The thin Republican majority in the Senate means that any infrastructure proposal must attract Democratic votes if it is going to have a chance of becoming law. Shuster said raising the gas tax is the best way to get Democrats on board and to provide the federal funds that Trump wants.

The question of how to finance big infrastructure measures has bedeviled efforts in the past, in part because of a broader GOP resistance to raising taxes and objections to raising the gas tax, which isn’t indexed to inflation. 

Senate Majority Leader Mitch McConnell of Kentucky, and a broad swath of GOP lawmakers in both chambers, have opposed increases to the gas tax in the past. House Republicans have been so resistant to raising the tax that during a 2014 debate over boosting the Highway Trust Fund, they weighed a plan to stop delivery of most postal items on Saturday rather than boost the gas tax or take other measures.

Congress in 2015 was able to finance only a three-year highway measure rather than a six-year version because of a lack of financing. Congress has also been forced to provide short-term replenishment of the Highway Trust Fund, used for highway and mass-transit project, out of general funds to prevent slowdowns in road construction because there wasn’t an agreement about how to finance projects.

Groups including the U.S. Chamber of Commerce and the AFL-CIO have long advocated a hike in the gas tax to help improve roads and crumbling bridges and create more jobs.

Shuster said he got constructive feedback from his GOP colleagues in Thursday’s session. He said while increasing the gas tax is the responsibility of the Ways and Means Committee, “this is something we really need to consider.”

©2018 Bloomberg L.P.