Would the New Senate Fuel Tax Deal a Death Blow to the Transport Bill?

Eight Democrats yesterday joined nearly the entire transportation universe, from road-builders to transit advocates, to warn the three Senate authors of a new climate bill against raising gas taxes without using the money for infrastructure. Their message, translated from the often impenetrable language of Washington: Imposing new fuel fees that are not routed to transport projects could torpedo the next long-term federal bill — which is already on life support.

Kerry_Lieberman_Graham_Hold_Press_Conference_XOA0hQd5O1Kl.jpg(from left) Sens. Lindsey Graham (R-SC), Joe Lieberman (I-CT), and John Kerry (D-MA) (Photo: Getty Images)

The climate measure being crafted by Sens. John Kerry (D-MA), Lindsey Graham (R-SC), and Joseph Lieberman (I-CT) is not expected to hit the street until Earth Day later this month. But with Graham indicating that a significant portion of the legislation’s new gas fee would be repaid to consumers via rebates, the group of eight senators questioned the effectiveness of adding new fuel charges without attempting to make the nation’s existing infrastructure more efficient.

"While we support your work to develop comprehensive legislation," the eight Democratic senators wrote to Kerry, Graham, and Lieberman, "we are concerned that your approach may not result in sufficient emission or oil consumption reductions from the transportation sector and may inadvertently hinder our efforts to pass a surface transportation authorization bill this year."

Many details of the Kerry-Graham-Lieberman approach remain unclear, including how much of the revenue raised by the new fuel fee would be rebated back to taxpayers rather than set aside for other uses. But one Hill source familiar with the issue said that the very act of raising gas taxes for non-transportation purposes would be a very bad sign for future federal reform efforts.

"Raising the gas tax and not putting it towards transportation
will be debilitating to the transportation bill," the source told Streetsblog Capitol Hill. "At what point is it
debilitating than not? That’s hard to say … We’re not going to raise
the gas tax 15, 20 cents
through this linked fee and turn around six months later to [raise it
to] pay for transportation. It’s just not going to happen."

To be sure, the transportation industry groups that contacted Kerry, Graham, and Lieberman this week agree on the need to direct money raised by any new fuel fees towards the nation’s built environment. But the groups are far from any consensus on how such revenue should be spent.

A coalition of pro-reform forces — such as Transportation for America, the Congress for the New Urbanism, and the Complete Streets Coalition — urged the three senators to spend carbon fees on helping states and localities craft long-term land use plans, a framework outlined in the legislation known informally as "CLEAN TEA."

"[B]ecause our federal transportation policy does not currently support oil savings or greenhouse gas reduction, we have deep concerns about proposals to deposit funds from sales of carbon permits in the highway trust fund without additional policies to direct those funds toward transportation projects that advance our climate and energy goals," the reform groups wrote in their letter to the senators.

A separate alliance of road and transit industry forces — such as the American Association of State Highway and Transportation Officials (AASHTO), the American Public Transportation Association (APTA), and several labor unions — made no bones about their desire to see any new carbon taxes go to the perennially cash-strapped highway trust fund.

"New fees placed on transportation fuels should be dedicated to the highway trust fund and invested along with other surface transportation funds under a multi-year highway and transit authorization bill," the 27 industry groups wrote to Kerry, Graham, and Lieberman, warning that passage of any new federal transport bill "will be very difficult, if not impossible," should a new fuel fee pass without its proceeds going towards infrastructure.

Three groups signed onto both letters: America Bikes, the League of American Bicyclists, and the Safe Routes to School National Partnership.

4 thoughts on Would the New Senate Fuel Tax Deal a Death Blow to the Transport Bill?

  1. The Gas tax should be set to 100% finance road maintenance and safety (vs. the current 51% or so). This would supplant the income and property taxes that currently diverted to maintain our transportation infrastructure in a fairly abysmal state.
    This would put the cost of maintenance on those who use, and damage the road most, in a fairly proportional way (related to the weight of the vehicle and the distance it travels)
    An additional tax should be levied to help provide for the health care sots associated with the massive pollution from burning liquid fuels.
    Yet another to pay for the emergency response personal and equipment used in response to traffic accidents and incidents.

    These would begin to start placing the social cost of driving onto those people who cause those costs, the drivers themselves. You can’t hope to change people’s economic behaviors without appropriate price signals.

    For that matter we should charge drivers and other users of foreign sourced fuels for the military cost of security for the extraction in those countries.

    Oh and a carbon tax would be good as well.

  2. So, what you’re saying, is that the US shouldn’t give ExxonMobil freebies anymore. This will happen the day a banana republic starts taxing the banana plantations.

  3. Why would part of the gas tax be “rebated”? This doesn’t make sense. This seems like a scheme to be able to raise gas taxes in a manner in which further use of those gas taxes for mass transit and support for bicycling and walking would be impossible.

    The solution is, quite simply, raise the gas tax, but use all of the proceeds to fund mass transit, bicycling, and walking. This will reduce the need for highway-only transit, reduce maintenance costs, and free up more space on the highways for motorists–a win for all concerned!

  4. The proposal is similar to the net-neutral gas tax proposal floated in 2008 by Richard Lugar. Basically they would raise the gas tax by $X and rebate the revenue evenly to all citizens. This would mean that those who use the average amount of fuel would see no difference in total cost, those who use less than average would benefit and those who use more would pay more than they currently would. It would change the incentive structure (more money to spend, but higher unit cost) and encourage people to use less fuel. Although not funding transit/pedestrian directly, it would indirectly encourage people to use alternative transport and build support for them. You saw this as gas prices went up in 2008 and interest in transit surged, even though transit didn’t get any additional money.

    This is a simple (easy to implement and run) system that will accomplish what we want without drawing the ire people who don’t think they should be paying for transit/pedestrian infrastrucure. In my opinion as long as transit is paid for through gas taxes, they will be the “welfare child” of automobiles. But if autos paid for all the damage they do, transit systems could probably support themselves in most cases.

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