December 4, 2013 - From the December, 2013 issue

Congressman Earl Blumenauer Proposes 15-cent Increase to the Federal Gas Tax

TPR spoke with Congressman Earl Blumenauer of Oregon to hear about his just-introduced bill, the UPDATE Act, which may raise the federal gas tax by 15-cents over 10 years. The federal gas tax has remained frozen since 1993, not rising with inflation and thus collecting less and less real revenue over time. As such, Congressman Blumenauer's plan could provide monies for investment in the nation's transportation infrastructure, which engineers hold to be in a serious state of deteriation. Billie Greer, President of the Southern California Leadership Council, participates in the discussion by raising the relationship between the federal government and local governments as both struggle to keep pace with infrastructure improvements. 


Earl Blumenauer

"We haven’t raised the gas tax in 20 years. We’ve been able to limp along over the last decade only by having an infusion of General Fund borrowed money, some accounting tricks, and short term financial tax gimmicks that do not provide a sustainable, long-term source of funding for critical transportation needs." -Earl Blumenauer

Congressman, you have just introduced a bill in the House—Update, Promote, and Develop America’s Transportation Essentials Act of 2013—which includes a federal gas tax increase. Can you talk a bit about the bill you’re introducing?

Congressman Earl Blumenauer: Absolutely. We’re calling it the UPDATE Act because it’s past time for the federal government to update its ability to be a full partner with transportation infrastructure. It’s ironic because, for over a century and a half, infrastructure was a bipartisan federal issue, going back to the Transcontinental Railroad Act, signed by President Lincoln, both Roosevelts—TR and Franklin Roosevelt were very active in their administrations with issues that related to rebuilding and expanding infrastructure. President Eisenhower signed into law the Interstate Highway System and the funding to pay for it.

But, of late, we’ve simply run out of steam as we’ve been running out of money. We haven’t raised the gas tax in 20 years. We’ve been able to limp along over the last decade only by having an infusion of General Fund borrowed money, some accounting tricks, and short term financial tax gimmicks that do not provide a sustainable, long-term source of funding for critical transportation needs.

Congressman, your bill would increase the federal gas tax by 15 cents, matching a proposal that was included in the 2011 Simpson-Bowles budget reform recommendations. Elaborate on how you chose that level of increase and what it would produce.

The key here is to take something that’s been on the table—it was part of the report, as you say, that was authored a couple years ago by Alan Simpson and Erskine Bowles for Congress and the administration. In that was a 15-cent, three-step increase in the gas tax, which will basically enable us to maintain our current funding levels. Absent that increase, we are looking at a 30 percent reduction over the next 10 years, and frankly, next fiscal year, there will not be enough money to do anything other than meet current commitments. We may jerry-rig something there to delay some of the full-funding grant agreements for transit and roads, but everybody agrees that’s no way to operate a program, and it would cause significant disruption for states and local governments that are relying on that federal partnership.

I would further make an additional adjustment to have it increase for inflation in subsequent years. The goal here is to just make the system reach the current funding level while we roll up our sleeves to find a way to replace the gas tax in the long term. With increasing fuel-efficiency, electric cars, hybrid cars, and just increased efficiency of conventional gasoline engines, the Highway Trust Fund is in a nosedive, and we have completely severed the link between gallons of fuel consumed and road user benefit. 

If the current gas tax, enacted in ’93, was indexed, what would it be today?

It has lost about half of its purchasing power. Actually, let me rephrase that. The typical road user, because of inflation and increased fuel efficiency, is paying only half as much per mile as they were 20 years ago, when the gas tax was last increased.

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How does that relate to need, in terms of investment in infrastructure?

We’ve had several high-level, bi-partisan commissions, including reports to the Bush administration that 10 years ago recommended that we ought to be significantly increasing our investments above the current status. According to the American Society of Civil Engineers, our infrastructure grades on their five-year report cards are D-pluses. We have tens of thousands of bridges that are structurally deficient, and we’re not keeping pace in many areas with additional infrastructure that could help ease congestion and promote our ability to compete nationally and internationally.

Congressman, for some time now and in the press about this announcement, you’ve spoken about the need to replace the gas tax, and I gather in your bill—the UPDATE Act—you would actually phase this tax out over the course of a decade. Elaborate on what your thinking is here.

What I would like to see is that this would be the last gas-tax increase. I would hope that over the course of this decade, we would be able to promote a sustainable alternative. Oregon gave you the first gas tax dedicated to highway construction 94 years ago, and for the last 10 years, Oregon has been pioneering an effort to get rid of the gas tax. We’ve had two very interesting and successful pilot projects with the vehicle-mile-traveled fee in lieu of a gas tax. We’ve been able to test alternative technologies, deal with what users are comfortable with, and develop an approach that would allow a range of choices about how people could keep track of miles driven without keeping track of where they have gone.

Raising the gas tax is not popular. People don't like it. I don't like it. But every politician who has seriously considered the issue along with groups as diverse as organized labor, AAA, the construction industry, small town mayors, local chambers of commerce, contractors. At the grass-roots level, people understand that something must be done and they’re willing to step up and do it. 

For those who read this interview, what manifestation of support are you looking for?

What I want is for people to find out where people stand. I think this is an approach. If somebody’s got a better approach, I’m all in favor. I don’t think it’s appropriate to further reduce an already inadequate federal level of transportation support. That partnership has been important—you’ve seen it in Southern California; I’ve seen it in Oregon and across the country. I think it’s very important for the groups and organizations that come to Washington, D.C. seeking help and assistance with a strong federal partnership to be clear about what they’re willing to support to achieve it. It’s important that people reach out to their members of the House and Senate to find out what they are willing to do to be able to have the federal government meet its obligations. I think it would be terrific if we had local forums in communities across the country so that we could put a spotlight on it.

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The gas tax is not a popular tax because it is a source of frustration where people have watched gasoline prices fluctuate wildly, and the gas tax is kind of a proxy for being cranky about high and erratic gas prices. Ironically, about half the people think the gas tax goes up every year, even though it has not been increased since 1993. It’s also probably the only commodity that people see real-time pricing several dozen times a day as they pass gasoline stations. So they have these constant price signals. It’s time for us to be clear about why we need an interim gas tax increase, and then we need to work for a long-term solution that is more sustainable and more fair.

Lastly, Congressman, what should folks that are following this UPDATE Act focus on over the next couple months to see what its trajectory and likelihood of adoption is? 

The reason I’m introducing it now is that there is an opportunity for this to be included in the budget negotiations that are taking place in Congress now and will continue in the weeks ahead. Democrats are insisting that a growing, aging America with inadequate revenues now needs more money. Many Republicans are saying, “This is not the time to raise taxes, if ever.” A gas-tax increase is a user fee that could be signed into law by Ronald Regan. Remember, prior to the Clinton-era gas-tax increase 20 years ago, the previous gas tax was raised a nickel-a-gallon in 1982 and signed by Ronald Regan. This is an opportunity to get the revenues that many feel that we need without it being a general tax increase, and as we are dealing with the various deficits, it is appropriate for any larger bargain, I think, to include the infrastructure deficit.

There may well be an opportunity to include this in the efforts over the next couple months. But, regardless of whether or not it makes its way into a final passage, we have a transportation bill that expires in less than 10 months and we have the need to deal with how we replace the already-inadequate revenues.

Now is the time to put it on the front-burner, the time for groups and organizations to make their feelings known, and to reach out to each member of the House and Senate to find out if they will support it, and if not, what their solution is to avoid a 30 percent reduction in federal transportation investment over the next 10 years. 

Billie Greer: Californians have been very receptive to self-help transportation-related measures on the county level, and they are very receptive because they see the direct result of funding of transportation projects that directly impact their community. There has been less and less of a reliance on federal funding, for all the obvious reasons. I’m interested in your read on that. That could be a stumbling block in terms of the dialogue as your proposal moves forward because so many transportation efforts have been drilled down on the county level.

Congressman Earl Blumenauer: I’ve worked with Mayor Villaraigosa to try and obtain more federal support for the great transit initiative that you passed in 2008 and sought to extend more recently—it came so close. The way this works best is in partnership. I’m very interested in encouraging state and local governments to come forward with their own initiative. The extent to which we can key these to be part of a thoughtful, sustainable, federal policy, we’ll get more out of the resource, and we’ll be able to deal with problems that are regional or are multi-state in nature. We’ll be able to help some jurisdictions that, frankly, if they were just doing it on their own from scratch, it would be hard to get the momentum and the support for the appropriate projects. Watching what’s happened with TIGER Grants, which I think were a very interesting initiative from the Obama administration to try to tie pieces together and be able to stretch resources, this is what we need to be focusing on. How can we do this together, to have access to more and better financing? How can we make sure we’re not starving one transportation mode at the expense of another? We need to revisit, and I would say, redefine, that federal partnership to make it appropriate for the challenges that we face today. 

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© 2014 The Planning Report | David Abel, Publisher, ABL, Inc.