House Ways and Means Committee Chairman Paul Ryan, who holds the keys to the car on transportation funding, said Wednesday that the federal tax on gasoline will not be raised to plug a gaping hole in revenue.
“We’re not going to raise the gas tax,” Ryan (R-Wis.) said at the outset of a long-anticipated hearing on how to come to grips with a shortfall that has sapped $65 billion from the general tax fund since 2008.
With funding for the nation’s highway and transit programs about to run out again July 31, no one on the committee objected when Ryan said he expected that another transfer from the general fund — estimated at $3 billion or more — would be necessary to sustain funding through the end of fiscal 2015.
“Having these temporary patches is no way to run a railroad,” Ryan said.
His lament echoed in the remarks of many committee members who have seen money from the traditional source — the 18.4-cent federal gas tax — decline to the point where it no longer covers the bills submitted by state and local governments.
“You get a lot more miles to the gallon than you used to,” Ryan said. “We just can’t chase fuel efficiency with much higher taxes.”
From state capitols to Congress, everyone desires a long-term federal highway bill that will give states and local officials the confidence to plan multiyear projects, but for years Congress has been gridlocked over how to pay for it.
“We have dodged it on a bipartisan basis,” Ryan acknowledged, citing several of the 34 short-term extensions that have allowed Congress to avoid the larger question of coming up with more money.
Congressional transportation planning is a bifurcated process, with one committee in each house setting policy while other committees come up with the means to pay for it. In the House, the Transportation Committee, chaired by Rep. Bill Shuster (R-Pa.), lays the groundwork but it falls to Ryan and others to come up with the cash.
“We’re all ears,” Ryan told three witnesses who came before his committee Wednesday.
He received a concise three-option response from Chad Shirley of the Congressional Budget Office: Reduce spending, increase revenue to the Highway Trust Fund or expect to transfer $11 billion from the general fund next year, a sum that would grow to $22 billion by 2025.
Bob Poole, a veteran transportation expert with the Reason Foundation, reminded the committee that he served on a special panel 10 years ago that recommended a shift from the gas tax to a formula in which drivers are taxed based on each mile they travel. Three years later, a federal commission endorsed that idea, but it hasn’t moved beyond the discussion stage.
Poole told the Ways and Means Committee he felt it was essential to continue to put the tax burden on those who drive rather than draw from general tax revenue, an idea that has been broached by other think tanks.
“Dedicated user fees are immune to the budget process,” he said.
In the short term, he said, if it is politically untenable to increase the gas tax, then spending should be trimmed to match current fuel-tax revenue. In that case, it should be limited to projects “truly federal in nature” rather than those that are “nice to have, but not really core” federal projects, Poole said.
At the very core, he said, is the need to spend $1 trillion over the next 20 years to modernize interstate highways. That could be launched with additional electronic tolling, he said. As that gets underway, Congress should encourage the shift away from the gas tax to a tax on vehicle miles traveled, a process that he estimated would take a decade.
Poole’s mention of more tolling — although he explained that individuals should get rebates so they aren’t taxed both at the gas pump and the toll plaza — drew backlash from members who say the public shouldn’t be made to pay for the interstates that were paid for once.
“Folks back home in Texas will most likely drive you off the road,” said Rep. Sam Johnson (R-Tex.), “because they’ve had it up to here with tolling.”
Johnson’s complaint came amid a litany of familiar hand-wringing by members who expressed frustration at their inability to move forward on the funding issue.
“The time has come for us to make a basic decision, and that’s whether we’re going to make one,” said the committee’s ranking Democrat, Rep. Sander M. Levin (Mich.).
“I think one thing we can all agree on is that Congress is failing the American people,” said Rep. Mike Thompson (D-Calif.).