Senators Propose 12-CPG Federal Gas Tax Increase

Bipartisan proposal would prop up Highway Trust Fund, index tax to inflation

Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) (CSP Daily News / Convenience Stores / Gas Stations)

Chris Murphy (left) , Bob Corker

WASHINGTON -- As the Highway Trust Fund threatens to go bankrupt this summer, two senators have proposed their own fix--a 12-cents-per-gallon (CPG) bump in the federal fuel tax.

The legislation proposed by senators Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) would:

  • Increase federal gasoline and diesel taxes by 12 cents per gallon, beginning in 2015 with an increase of 6 CPG, and then another 6-CPG increase in 2016. The senators contend the additional revenues would offset current MAP-21 spending levels for the next decade and would replace all of the federal tax's lost buying power since Congress last raised it in 1993.
  • Index the gas tax to inflation using the Consumer Price Index (CPI).
  • To help offset the revenue raised from increasing the gas tax and its burden on consumers and businesses, the senators proposed looking for other forms of tax relief, such as permanently extending some tax provisions with bipartisan support in the "tax extenders" bill. They estimate this could supply $190 billion in permanent tax relief during the next decade.

"For too long, Congress has shied away from taking serious action to update our country's aging infrastructure," said 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.

"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," said Corker. "If Americans feel that having modern roads and bridges is important, then Congress should have the courage to pay for it."

The bipartisan proposal has already been endorsed by AAA president and CEO Bob Darbelnet, who described it as a "commonsense and fiscally responsible plan to improve roads, bridges and transit systems nationwide." He noted its recent survey of consumers, in which 52% said they would be willing to pay higher fuel taxes if it led to improved roads, bridges and mass transit. It described the federal fuel tax as "the most efficient and fair method available" to fund transportation maintenance and improvements.

"We commend Senators Chris Murphy and Bob Corker for introducing legislation that will increase money for infrastructure through the most fair and efficient means possible," said Lisa Mullings, president and CEO of the National Association of Truck Stop Operators (NATSO). "Raising the fuel tax is long overdue, and this is the right solution for both motorists and businesses."

NATSO has long held that raising the fuel tax is the best option for generating critical transportation revenues.

Other groups in support of the plan include Transportation for America, a bipartisan alliance of political, business and civic leaders, and the Associated General Contractors of America. The Alliance for Toll-Free Interstates, which opposes the opening of tolling on federal interstates to address the Highway Trust Fund problems, praised the proposal for not relying on tolling but stopped short of endorsing it.

And Patrick D. Jones, the executive director of the International Bridge, Tunnel & Turnpike Association, representing owners and operators of toll facilities and the businesses, described the proposal as "gutsy," praising the decision to chain the gas tax to inflation, but said the plan did not address the long-term financial issues of the trust fund. Instead, the IBTTA endorses the Obama administration's proposal to eliminate the prohibition of tolling on existing interstates.

The Highway Trust Fund currently is funded by an 18 cents-a-gallon tax on gasoline and a 24 cents-a-gallon tax on diesel. The federal fuel tax was last increased in 1993. Over the past two decades, inflation has eroded the buying power of the 18.4 cents federal fuel tax to just 11 cents.