Can Fuel Tax, Federal Tax Rebate, Break Gridlock?
The American Road & Transportation Builders Association (ARTBA) outlined a detailed proposal it believes could end the political impasse over how to fund future federal investments in state highway, bridge and transit capital projects. The “Getting Beyond Gridlock” plan would marry a 15 cents-per-gallon increase in the federal gas and diesel motor fuels tax with a 100 percent offsetting federal tax rebate for middle and lower income Americans for six years.
The plan, ARTBA says, would fund a $401 billion, six-year highway and mass transit capital investment program and provide sustainable, user-based funds to support it for at least the next 10 years.
“If our national leaders think they need to use budget gimmicks or ‘one-offs’ again to pass the surface transportation investment program the states need and the business community has been pleading for, then use those devices to provide a $90 tax rebate to middle and lower income tax filers to offset the cost to them of a 15 cent per gallon increase in the federal gas tax,” ARTBA President & CEO Pete Ruane said in announcing the plan.
ARTBA has long maintained that an increase in user fees, specifically the federal motor fuels excise rate, is the most efficient way to resolve the Highway Trust Fund (HTF) cash flow problem—now about $15 billion per year—and raise revenue needed to fund expanded capital investments in freight mobility and traffic congestion relief over the next decade. The politics of a user fee increase has been a stumbling block.
The proposed ARTBA plan addresses that, by tying the first increase in the federal gas and diesel motor fuels tax rate in 22 years with, if necessary, an offsetting annual gas tax rebate for middle and lower income taxpayers for the length of the next surface transportation program reauthorization bill, which is due May 31.
You can find their complete news release here.
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