“Problem Solvers” look to break infrastructure standoff

The caucus places priority on stabilizing Highway Trust Fund revenues, which are generated by the 18.4-cent per gallon federal excise tax on gasoline that hasn’t been increased since 1993. They point out that because it hasn’t been indexed to inflation, construction costs or fuel economy standards, the purchasing power of the tax is worth 40 percent less than it was 26 years ago. Congress has had to resort to supplementing the trust fund since 2008 through transfers from the U.S. Treasury and other federal funds.

The group agreed that one potential solution is to update the tax by indexing it for inflation (either immediately or phasing it in), in addition to a “modest annual registration fee” on electric vehicles “which currently either contribute nothing or contribute significantly less to the Highway Trust Fund than gasoline-powered vehicles,” the report asserts.

In addition, the caucus proposes a user fee based on freight value that would be assessed through waybill taxes, essentially extending the current air cargo tax to trucking services. It also supports pilot projects to help transition to a mileage-based user fee (also known as a vehicle miles tax, or VMT) while assessing existing state and regional pilot projects. “Congress should also consider creating a pilot project to implement a mileage-based user fee on fully automated vehicles,” according to the report.

But despite bipartisan support within the group, getting other Republicans within Congress, particularly in the Senate, to accede to any kind of tax increase will be difficult. Early optimism that Republicans might be willing to give ground on raising the federal gas tax has since waned.

Regarding port infrastructure, the report points out that the U.S. is losing business to Canada and Mexico because of inadequate funding for maintenance dredging to accommodate larger classes of container and other cargo ships.

One solution, the caucus asserts, is to ensure that the harbor maintenance tax – a .125 percent fee on cargo value assessed to cargo owners that import goods into U.S. ports – be fully utilized within the Harbor Maintenance Trust Fund.

Allowing full use of the revenues collected into the fund, a proposal supported by the American Association of Port Authorities, would provide an extra $18.6 billion for maintenance dredging over the next 10 years, a 29 percent increase, the group contends.