House GOP Transportation Bill Would Raise Taxes on Transit and Bikes

The bill would amount to a tax increase of more than $200 million annually on American transit agencies.

If House Republicans get their way, the next federal transportation bill will set off a round of fare hikes and service cuts. Photo: LivableStreets Alliance
If House Republicans get their way, the next federal transportation bill will set off a round of fare hikes and service cuts. Photo: LivableStreets Alliance

New taxes on transit and bikes would raise revenue for highway construction under a bill introduced last week by Pennsylvania Republican Bill Shuster, chair of the House Transportation Committee.

In addition to raising the federal gas tax, the bill calls for a huge increase in fuel taxes paid by transit agencies, as well as a 10 percent tax on adult bicycle tires and electric batteries for cars and bikes.

Federal lawmakers have not raised the gas tax since 1993, and gas tax revenues no longer come close to paying for the federal transportation program. Shuster’s bill would raise the gas tax by 15 cents per gallon (20 cents for diesel) over three years, then indexing it to inflation. Over 10 years, the bill would bring in $300 billion more for federal transportation programs than current funding levels.

But Shuster has larded his bill with revenue sources that put the squeeze on transit and biking, which are already at a huge structural disadvantage in the U.S. While the bill is not expected to go anywhere, the idea of raising taxes on transit and bikes may have staying power with Republican lawmakers.

The bill includes a 10 percent tax on adult bicycle tires, for instance, estimated to raise $15 million a year by 2021 [PDF]. The tax may not serve any transportation policy purpose, but it’s a great way to pander to angry conservatives who resent the tiny fraction federal spending that goes toward bike infrastructure.

The damage to transit agencies would be much worse. Since 1978, transit agencies have been exempt from federal fuel taxes. Shuster wants to eliminate that exemption. Transit agencies running diesel buses would have to start paying the existing 24.5-cent per gallon diesel tax, plus the 20-cent hike on diesel as well. Agencies operating diesel trains would also be newly subject to a smaller 4.3-cent per gallon tax.

American transit agencies consumed 603 million gallons of diesel fuel in 2017, according to the American Public Transit Association [PDF] (although not all apply for the exemption). The Shuster bill would amount to a tax increase of more than $200 million annually on transit agencies for diesel alone (other fuels are taxed at different rates and would add to the total). Many agencies would be forced to hike fares, cut service, or raise local taxes in response.

Shuster’s justification is that “a number of surface transportation system users do not currently pay into the system, even though they benefit from it.” But it’s an indefensible policy, shifting some costs of the federal transportation program — which largely funds highways — to transit riders who can least afford it.

“The Highway Trust Fund shouldn’t be funded on the backs of transit and bikes, even if it is a short-term measure,” said Sean Doyle, a spokesperson for Transportation for America.

  • woodyguthrie

    Behold the finest ideas the Republican party has to offer.

  • Michael

    There’s just no way to implement, administer, and audit a federal tax program for under $15m. So all this would do is increase government bureaucracy and cost tax payers money.

  • HamTech87

    Does this mean that I can ride my bicycle on the interstate? ;-(

  • Larry Littlefield

    It’s nasty tribalism, not an idea.

    The Republicans haven’t had any ideas since 1980.

    The Democrats haven’t had any ideas since 1965.

    Other than the bipartisan pillaging of the common future, and the later-born generations that will live in it.

  • Stewart Clamen

    Would this encourage transit agencies to move away from diesel buses?

  • TakeFive

    Yes, and they already are. Consider China which is building 950 net-zero EV buses about every five weeks. https://www.bloomberg.com/news/articles/2018-04-23/electric-buses-are-hurting-the-oil-industry

  • TakeFive

    I’d like to thank Bill Shuster for being one of the rare excellent public servants in Congress, especially the House. His steady hand and guidance have been invaluable (See FAST Act signed by Obama Dec 3, 2015 ); he will be sorely missed and I wish him well on his retirement (I am NOT a Republican).

  • Elizabeth F

    I’d be happy to pay 10% tax on tires… as long as that means that all Federal Highwasy (including Interstates) are designed and built with safe bicycle infrastructure.

  • TakeFive

    That’s been largely the case in Colorado over the last 15 years. It’s not universal like in totally rural areas but if a smaller rural community has 2 exits then bike lanes in their own ROW are added between both exits. The recent completion of an added lane to U.S. 36 between Denver and Boulder included bike lanes. Just 2 of many examples.

  • Altered Beast ✓ᵛᵉʳᶦᶠᶦᵉᵈ

    isn’t the whole republican party platform against taxes? what the fuck?

  • TakeFive

    Do you have a Guthrie favorite?

  • Victor Cardona

    I’d be in favor of taxing fuel for transit agencies since I think that global climate change is the major issue of our time. My hope would be that this will accelerate transit agencies’ move to electric busses. However, I would want any such tax levy to be phased in so as to lessen the immediate impact.

    I’d also be willing to accept a small tax on bicycle tires and batteries if that money was devoted specifically for walking and bicycling infrastructure.

  • Seth Rosenblum

    If this is the best way to get a federal gas tax increase through, they should absolutely do it. The tire tax is stupid, but worth it to get the gas tax higher.

  • Caleb Kirksey

    This is my thought exactly. We absolutely need a higher gas tax

  • The last thing the country needs is more taxes. What we need is to have audits done of each governmental agency and also evaluate all administrative and managerial personnel and fire ineffective and incompetent ones. The audits will spotlight inefficiencies. This is what needs to happen BEFORE any new taxes are recommended, don’t you think?

  • Larry Littlefield

    I’ve become convinced that the best thing that can happen is to get the federal government out of surface transportation altogether.

    These kinds of proposals don’t change my mind.

  • mckillio

    No taxation without representation?

  • Mike

    I sometimes wonder how much of a dollar of taxes to the feds is lost by the time the money is collected and redistributed to state and local recipients. Why send money to DC only to have DC send it back to us?

  • woodyguthrie

    Trump score: How often Shuster votes in line with Trump’s position – 98.9%

    He will not be missed.

  • Jeremy

    “evaluate all administrative and managerial personnel and fire ineffective and incompetent ones”

    This needs to be done for all banks, insurance companies, airlines, internet providers, oil companies, real estate developers, corporate prisons, charter schools, pharmaceutical companies, and corporate farms.

  • SamR

    That’s not the Republican goal. They’re seeking to increase taxes in a way that “owns the libs”— that’s why the taxes proposed are on stuff like bikes, trains, buses, subways, electric batteries, etc. You can’t raise real revenue, and its counterproductive to the nation’s transit problems, but it’ll annoy the left.

    The gas tax will get stripped out in committee (except for the part making government entities pay the existing tax) and the rest will proceed.

  • Yeah but businesses are for profit and weed themselves out > governmental entities are parasitical and self serving and their solutions are always larger staffs, more pay and benefits, and more taxes. There is plenty of money in governmental budgets if we just get the inefficiency and waste gone.

  • Wranger

    I agree on the bike taxes going toward bike and ped infrastructure only, and would be happy to pay a tax on my tires for this. However, the fuel tax would likely decimate what’s left of our meager transit systems since most don’t have the money to upgrade their fleets. The emphasis should be on reducing the (much bigger) impact to climate change from private vehicles than putting the onus on broke transit systems to do so first.

  • Wranger

    I’ve lived in Denver for 10 years and follow bike/transit issues but have no idea what you’re talking about. Reference, please? The US36 bike path is great, but I haven’t heard of any bike infrastructure being put in place along the upcoming awful I-70 expansion, C-470 expansions, I-25 south of Denver, etc., but maybe I’m misunderstanding.

  • OneSF

    The problem is that electric buses cost a lot more and American public transit agencies can barely even afford to replace their existing buses. Transit agencies already use up all of their available FTA funds to buy new buses, so they’ll have an even harder time replacing their fleet with all electric buses.

  • Flatlander

    People like you calling for pointless “audits” is a fantastic example of precisely the crap that government agencies have to put up with in the name of “accountability”

  • TakeFive

    Eh, he’s a Republican but that has NOTHING to do with what I was speaking to.

  • TakeFive

    The commitment to improving C-470’s trail … reflects CDOT’s views of such trails as increasingly key pieces of the infrastructure networks it maintains.

    “It’s important for us to look at these trails as extensions of the highway or a motor-less highway, if you will,” CDOT spokeswoman Stacia Sellers said last week, pointing to the agency’s recently completed work along Interstate-70 that created a separated bike lane. “We are looking at what the public needs and what the public needs are safe and more accessible trails.”

    https://www.denverpost.com/2017/05/02/c-470-project-douglas-county-making-safer-way-for-bikes-too/
    I’m aware of projects in Walsenburg, Durango, Grand Junction, Glenwood Springs and Summit CO. Afaik the only way to search them is to search each project CDOT has done as they are a piece of those projects, for example: https://www.codot.gov/projects/archived-project-sites/i25cimarronDB/trails

    Who do you think funded the bike trail from Denver to Glenwood Springs? Good guess that both GOCO and CDOT were key players. How ’bout the historic Mountain Branch of the Santa Fe Trail? CDOT is a state agency; Denver is a city.

  • davidlubic

    Let’s just admit it. . .our corporate overlords want to make sure we are permanently, forever wedded to the automobile for all time, and to oil for all time.

    So often we hear that public transit, including intercity rail, has to make a profit and shouldn’t be subsidized. Well, when are we going to do the same for the road system, or at least demand that it be self sustaining instead of subsidizing it?

    Highway Revenue, 2015: $143.3 billion
    Highway Expenditures, 2015: $235.2 billion
    Highway Subsidy, 2015: $91.9 billion

    Source:

    https://www.fhwa.dot.gov/policyinformation/statistics/2015/hf10.cfm

    This works out to just over 53 cents per gallon, and is what amounts to cash flow accounting. Full cost accounting would also include depreciation charges and an allowance for the deferred maintenance we have.

    And we haven’t even started on externalities, like the costs of congestion, air pollution, and a biggie, oil wars.

    http://www.iags.org/costofoil.html

    And it will get even worse if electric cars make more headway. They don’t contribute to the road revenue picture, but they do use capacity, same as a regular car.

  • A2er

    Like Comcast, our gas companies, the power companies, our big pharma companies? Like those? Newsflash: they’re monopolies that buy legislators to protect their monopolies and they just get bigger and bigger and more and more profitable. Off us…

  • Larry Littlefield

    The federal government is fairly efficient that way.

    Remember, the federal government doesn’t actually do much of anything other than the military, homeland security and the post office. It takes money in, and sends money out — more and more of it for seniors. If you are interested, I tabulate federal expenditures over time every four years when there is a Presidential election.

    https://larrylittlefield.wordpress.com/2016/02/21/federal-expenditures-a-government-transformed/

    There seems to be no stopping this trend, so let’s just go with it. As for infrastructure, you pay for yours, we’ll pay for ours, and we’ll cut out the middle man in Washington. So we don’t have to deal with these a-holes who think you pay for yours, and you pay for ours, is somehow fair.

    https://larrylittlefield.wordpress.com/2016/02/27/the-disappearing-federal-government-bad-news-and-good-news/

    Use the existing gas tax to take care of all the young people permanently maimed by the oil wars.

  • AlanThinks

    Once again, we see the power of old white men (I am one) who still live in the 20th century where fossil fueled vehicles ruled America. Time to vote them out of office and into their recliners watching Sean Hannity spout fumes. If we do not get off of fossil fuels fast we will have robbed the future of a habitable world.

  • ocschwar

    A tire tax would be an instant STFU to every driver who rants about how the gas tax pays for the road. I say it’s time to do some jiu jitsu and support it.

  • pdx_redwood

    You already can in Oregon. On the shoulder at least.

  • Eric

    Pro tip: THEY WILL FIND SOMETHING ELSE TO RANT ABOUT

  • crazyvag

    Why not set taxes to match expenditures?

  • JonAK

    And what a surprise: Bill “Cash ‘n’ Carry” Shuster raked in over $130,000 from his pals in the oil and gas industries, folks who don’t think much of people who ride bikes or use mass transit. Bill is retiring after this term. Wonder where he plans to work next?

  • Richard

    53 cents a gallon sounds good, converting some(or all) federal highways to tolls sounds better.

  • Stephen Simac

    Although gas taxes, vehicle fees and fines don’t even cover the immense costs of roads, parking and infrastructure maintenance, (in some states most monies generated by current users go to paying interest on bonds from highway building of past decades) most drivers believe they do. Some insist they should be granted ownership of public roads because of this uninformed belief.

    Washington state proposed a new adult bicycle sales tax (odd how children’s bikes are excluded from both these proposals, maybe because they believe kids should ride on sidewalks) to pay for some portion of transportation spending. Doubt it could make much of a dent in budget deficits, but at least cyclists could make a dent in that widespread belief. They will undoubtedly find something else to rant about..

  • Stephen Simac

    There are also lost revenues from up to 40% of urban groundspace devoted to roads and parking, and reduced property values from residential buildings near noisy, polluted “free” ways or busy highways. There are the medical costs from a sedentary, lonely society induced by our transportation system, that makes those too young, old,disabled or poor to drive third class citizens.

  • thielges

    Or there could be a worse outcome which is those ranting drivers will claim that the bike tire tax revenue (which will be approximately $0 after administration costs are deducted) should go towards funding bike paths, leaving roads the exclusive domain of automobiles. Using logical arguments to address ranters generally doesn’t work because the ranters aren’t interested in the truth, they’re only interested in supporting their conclusions, whether or not they are right.

  • or THEY WILL FIND SOMETHING ELSE TO JUSTIFY THE SAME CONCLUSIONS.

  • Lauren Bertrand

    You may have a credible argument with utilities, but big pharma aren’t monopolies at all. There are already a ton of them, thereby nullifying any attempt to call them monopolies. And they’re among the most regulated industries in the country. And they go out of business if they make too many bad decisions.

  • Lauren Bertrand

    Much as I like the idea of supporting transit, it’s hard to make a strong case for increased funding at the moment. Isn’t ridership down in over 95% of the cities with the largest networks–even when there have been many incremental expansions, upgrades and improvements over the years? (Never enough in the eyes of Streetsbloggers, but let’s face it–they’re there.)

    Middle income people are showing an increasing willingness to pay for point-to-point travel through ride hailing and ride sharing apps (Uber/Lyft). Should this continue, it will work wonders for reduced demand for parking lots in urban settings, thereby freeing up space for better uses than those nasty garages and surface lots. It may eventually cause car ownership to flatline or decrease. From the perspective of urbanism, this should be a great thing.

    But Uber/Lyft aren’t doing a dang thing to remove cars from the road. Same congestion as ever, perhaps even worse, as more of the cars are filled with drivers meandering and waiting for their next solicitation. This may be the argument that transit agencies need to pose to assert their case when a new form of transportation is posing serious competition.

  • Bring on the bike tax and EV battery taxes. If Oregon can tax bikes, why can’t Uncle Sam (or the other 49 states)?
    https://www.planetizen.com/news/2018/03/97461-oregon-could-expand-its-bike-tax
    Just one thing about the revenues: like the gas tax, earmark them, but for bike and ped infrastructure. “The Federal Bicycle Trust Fund” could be coined 🙂

    As for EV battery taxes – revenues can to to Highway Trust Fund….

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