In just a few short months, the Highway Trust Fund will go broke. No one likes to hear the words “raise taxes,” but in some cases, tax increases are not only warranted but essential to our industry and the national economy.
On Dec. 4, 2013, Rep. Earl Blumenauer (D-Ore.) along with other leaders in the fields of transportation, labor, commerce, and construction introduced H.R. 3636, The Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Act. The bill would phase in a 15 cent-per-gal. tax increase over the next three years on gasoline and diesel fuel.
Transportation advocates began raising concerns about the solvency of the Highway Trust Fund in the early 2000s, as it became apparent we were facing a perfect storm: automobile fuel efficiency was on the rise; our national infrastructure was deteriorating faster than we were repairing it; and the need for new roads and added lane capacity in areas of escalating population growth was increasing.
The federal gas tax was last raised in 1993 by 4.3 cents (to a total of 18.4 cents-per-gal. as part of the Omnibus Budget Reconciliation Act. Previous to that, it was raised by a nickel in 1982 during the Reagan Administration.
Instead of addressing the Highway Trust Fund’s pending insolvency, Congress has added to the General Fund deficit by transferring more than $50 billion of General Fund revenue to the Highway Trust Fund in order to keep it afloat. That is not acceptable as a permanent strategy.
In order to maintain current funding in the coming years, the Highway Trust Fund will need almost $15 billion a year (in addition to current gas tax receipts). The UPDATE Act would raise around $170 billion over 10 years.
The UPDATE Act is based on sound fiscal analysis, by virtue of the recommendations of the Simpson-Bowles report, the National Surface Transportation Policy and Revenue Commission, and the National Surface Transportation Financing Commission.
I would like see Congress act on this critical UPDATE as soon as possible.
Mark S. Kuhar, editor
Member: Construction Writers Association