Wednesday, June 18, 2014
WASHINGTON—U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Bob Corker (R-Tenn.) today unveiled the first bipartisan proposal to shore up the Highway Trust Fund by making changes to the federal motor fuels tax, which funds improvements to roads, bridges and transit systems. The proposal would create a long-term, stable funding mechanism for the Highway Trust Fund and enact tax relief for American families and businesses.
“For too long, Congress has shied away from taking serious action to update our country’s aging infrastructure,” said Senator Murphy. “We’re currently facing a transportation crisis that will only get worse if we don’t take bold action to fund the Highway Trust Fund. 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. 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. This modest increase will pay dividends in the long run and I encourage my colleagues to get behind this bipartisan proposal.”
“Growing up in Tennessee as a conservative, I learned that if something was important enough to have, it was important enough to pay for. That’s how we’ve governed in the Volunteer State, which has resulted in the second best transportation system in the country without having one penny of road debt,” said Corker. “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. 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. If Americans feel that having modern roads and bridges is important then Congress should have the courage to pay for it.”
The federal Highway Trust Fund provides more than half of the country’s spending on transportation projects and will begin to run dry in July, likely halting the construction of any new transportation projects without action from Congress. This will create a $50 billion hole in states’ 2015 transportation budgets and a $160 billion hole in state budgets over the next decade if left unaddressed.
The federal gas and diesel taxes, which are used to fund this account, have not been updated in over 20 years — despite the desperate need for road and bridge improvements. As a result, the purchasing power of the gas tax is approximately 63 percent of what it was in 1993, and continues to decline. A change to the federal gas tax would not only strengthen purchasing power, it would also create thousands of new jobs and allow states to invest in long-term economic development projects.
The senators’ proposal would increase the federal gasoline and diesel taxes by six cents in each of the next two years for a total of 12 cents. This would provide enough funding to offset current MAP-21 spending levels 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.
The plan would index the gas tax to inflation, using the Consumer Price Index (CPI), to ensure that it remains viable into the future.
To offset the revenue raised from increasing the gas tax to pay for roads and transportation projects, Murphy and Corker propose providing net tax relief for American families and businesses. Examples of tax relief could include: permanently extending some of the tax provisions in the “tax extenders” bill that already have broad, bipartisan support, creating potentially billions of dollars in permanent tax relief for American families and businesses over the next 10 years alone; or another bipartisan proposal to reduce taxes by at least the amount of revenue raised from the gas tax over the next decade.
Historically, this proposal has received bipartisan support. Presidents Ronald Reagan, Bill Clinton, and George H.W. Bush all raised the gas tax in order to fund the Highway Trust Fund and make infrastructure improvements.
Former Governor and Co-Chair of Building America’s Future Ed Rendell said, “Instead of sitting on their hands as they watch America’s roads and bridges further deteriorate, Senator Murphy and Senator Corker have the courage to step up and offer a real solution. Building America’s Future calls on Congress to follow the Senators’ lead and act decisively to prevent the Highway Trust Fund from going bankrupt. Without more revenue, the Trust Fund will run out of money in August and thousands of critical projects will be cancelled or delayed all over the country and nearly 600,000 jobs could be lost. This would be a major hit to America’s economy and cannot be allowed to happen. This is a time for real leadership and Senators Murphy and Corker have answered that call.”
“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,” said Janet Kavinoky, executive director of Transportation and Infrastructure at the U.S. Chamber of Commerce. “We thank Senator Murphy and Senator Corker for their proposal that will generate a constructive conversation in finding a way to fund the investment necessary for our highways, highway safety, and public transportation.”
James T. Callahan, General President of the International Union of Operating Engineers said, “The Operating Engineers appreciate the work Senators Murphy and Corker have done to forge a bi-partisan proposal that secures critically important funding for our nation’s transportation infrastructure. A long-term funding solution brings certainty to transportation planners and the construction industry, while securing hundreds of thousands of family wage jobs for construction workers. Dedicated, multi-year funding is the only solution if we are to rebuild our crumbling roads and bridges the right way. No more quick fixes. No more temporary patches. We urge every lawmaker to support this proposal and to move swiftly before the Highway Trust Fund runs dry.”
“Our transportation network is key to the long-term economic competitiveness and growth of our cities, towns, and suburbs,” said John Robert Smith, Chairman of Transportation 4 America and former Mayor of Meridian, Mississippi. “Communities across the country are stepping up and raising additional revenue to meet their transportation challenges but cannot solve these needs alone. With the Highway Trust Fund set to become insolvent as soon as next month, Senator Murphy and Senator Corker’s proposal takes the important step of ensuring communities will have a strong, reliable federal partner as they invest in their economic future.”
“Americans are willing to pay a little more if it means they will have access to better roads, bridges and transit systems,” said Bob Darbelnet, AAA President and CEO. “It is time for our nation’s leaders to stand with Senator Murphy, Senator Corker and others that support improving our country’s transportation system.”
To read more about the Murphy-Corker proposal, click here.