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House T&I’s DeFazio: Raising the gas tax more likely in new Congress

House T&I Committee hearing on Feb. 7. Credit: John Gallagher/FreightWaves

Members of the House Transportation & Infrastructure (T&I) Committee agreed on Thursday, February 7 on the need for a bold and long-overdue plan to fix the nation’s infrastructure, but the big unanswered question continues to be how to fund it.

Raise the gas tax? Install a vehicle-mile tax (VMT)? Toll roads? Public private partnerships?

All were discussed as part of a potential “401-k” of funding options, as it was described by one committee member. But whatever method that ultimately gets written into a legislative proposal, the key will be convincing enough members of the House Ways & Means Committee, which has jurisdiction over tax policy and is the ultimate arbiter for funding.

“We don’t make those ‘pay for’ choices, but it’s up to us to make the case to Ways & Means, and an irrefutable case to the American people, that if we don’t do it now, we’ll all be paying for later,” said House T&I Chairman Peter DeFazio (D-OR).

Speaking to reporters after the seven-hour long hearing, DeFazio said he has set $500 billion as a lower limit for a six-year surface transportation reauthorization bill. He also said he believes raising the gas tax is the best way to pay into the Highway Trust Fund, and that there’s a much better chance of doing that now that the Democrats control the House.

“The Republicans were ideologically opposed to investing in infrastructure” when they controlled the House, DeFazio said, noting that former Ways & Means chairman Kevin Brady (R-TX) held just single infrastructure meeting that featured one witness. “So yes, I think there’s heck of a lot better chance.”

After asserting that America has turned into “one big pothole,” Ray LaHood, Secretary of the U.S. Department of Transportation under President Obama, was asked during the hearing to give his advice on how to reach a bipartisan agreement that can actually make it into law.

“Get a signal from the White House on what [President Trump] is agreeable to,” he said. “You can have all the plans you want, but if you don’t have the president on board, it will be difficult to pass a bill in the Senate.” Getting President Trump on board early, he said, “means America is back in the business of building roads and bridges. But we have a very short window, it has to happen this year.”

UPS Freight President Rich McArdle, who was speaking on behalf of the U.S. Chamber of Commerce, made the case for raising the gas tax to prop up the Highway Trust Fund. The U.S. Chamber has called for raising gas and diesel fuel taxes five cents per year in each of the next five years – and include an index for inflation – which would raise $394 billion over the next 10 years.

McArdle said that UPS operates 120,000 commercial vehicles, and increasing congestion requires UPS to dispatch more tractor-trailers and delivery vehicles than necessary. “Will this be the Congress that stabilizes the Highway Trust Fund?” McCardle asked, “or will it kick the can down the road?”

When asked about the VMT as a funding source, McArdle said that there needs to be a true “proof of concept” pilot program in order to understand the privacy issues involved, and to determine the true cost of such a system. “We see the VMT as a bridge to the future, but the immediate [funding] answer we [U.S. Chamber of Commerce] think is still the Highway Trust Fund.”

Looking to take advantage of momentum that’s building on Capitol Hill to get an infrastructure package done, U.S. Rep. Alan Lowenthal (D-CA), who represents the Port of Long Beach, a major container port, said he plans to reintroduce the National Multimodal and Sustainable Freight Infrastructure Act. The legislation would raise $8 billion per year on freight projects with a focus on multimodal projects, by creating a new trust fund that would be paid into by a one percent waybill fee on the freight transportation cost.

“We need to build an infrastructure system that connects maritime with surface – we’re really talking about one system,” Lowenthal said.

There was consensus on both sides of the aisle that any new infrastructure funding will incorporate incentives for new technology, including electric and autonomous vehicles, drones and even freight hyperloop tubes.

Also fighting for infrastructure attention will be the Green New Deal, released by U.S. Rep. Alexandria Ocasio-Cortez (D-NY) and U.S. Senator Ed Markey (D-MA) earlier in the day. The question will be whether the politically controversial proposal, which seeks to get the transportation sector to zero emissions over the next 10 years, can be a catalyst to moving an infrastructure bill or become a roadblock to getting something done.

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.