The Reagan administration's proposed gasoline tax increase to rebuild highways, bridges and transit systems received a relatively friendly reception from the Senate Finance Committee yesterday after Transportation Secretary Drew Lewis assured several senators their pet concerns were being cared for.
Lewis promised the committee that the administration will work to see that the $5.5 billion produced by the tax will be shared by all states, even those that might be unable to pay the state share (10 percent to 20 percent of total cost) required in federal aid construction projects.
About 13 states are possibly in that position, Lewis said. Sens. John C. Danforth (R-Mo.) and David F. Durenberger (R-Minn.) urged him to look at the problem. Charilyn Cowan, transportation staff director at the National Governors' Association, said that six states -- Indiana, Missouri, Maine, Vermont, Michigan and California -- have told her they would have a problem, and that there probably would be others.
The gasoline tax increase has come to be viewed as a jobs program by many on Capitol Hill, and if the money could not be spent by the states, it would not produce jobs. Lewis estimated that the government could push out $5 billion to $6 billion in contracts within 90 days of congressional approval, but he stressed that the tax was needed to fix the transportation infrastructure regardless of its impact on employment.
Furthermore, Lewis said, while he is willing to work on the problem for those 13 states, "I hope we would not try to make this a 100 percent grant. I think there is some advantage to keeping the heat on state legislatures and governors" to finance transportation projects.
Lewis also promised Sen. Lloyd Bentsen (D-Tex.) that the money for transit in his opinion "should include" the possibility of starting new rail systems, such as one being sought by Houston. That is a significant shift in the administration position which has opposed new rail transit systems.
In addition to increasing the gasoline and diesel fuel tax from 4 cents to 9 cents a gallon at the refinery, beginning next April, the administration proposal would change the tire, spare-part and sales taxes so that the heaviest trucks would pay a large annual increase while lighter trucks would get a decrease.
The American Trucking Associations, which supports the gasoline tax increase, called the truck changes "confiscatory." It said the Transportation Department has inaccurately allocated costs of highway wear and tear against heavy trucks.
Lewis said he wanted to work to eliminate inconsistencies in state weight, length and width limits for big trucks, but said he will not have trucks "rip up our highways" without paying their fair share.
The administration proposals would also tax retread rubber more heavily while eliminating tire taxes for passenger cars. The National Tire Dealers and Retreaders Association said that could "threaten the entire passenger retreading industry" and Lewis said he was willing to discuss that point.
Sen. John Heinz (R-Pa.) introduced an amendment requiring that "substantially all" construction materials be of U.S. manufacture, and the American Automobile Association opposed the bill because it would spend gasoline tax money on public transit, a long-time AAA no-no.