U.S. Transportation Secretary Ray LaHood told attendees at an American Road & Transportation Builders Association conference that while the Highway Trust Fund is receiving insufficient revenue to fund necessary infrastructure improvements, increasing the gas tax is not the answer. He proposed a combination of three programs that the administration believes could help fill the revenue shortfall the reauthorization bill is facing: increased highway tolling, developing more public/private partnerships, and creating a national infrastructure bank.

"If you take the programs we have and begin to think of PPPs, you begin to think that there is a path to infrastructure improvement that doesn't include [raising] the gas tax," LaHood said.

LaHood spoke last Friday during ARTBA's Public/Private Partnerships Conference in Washington about the progress being made by U.S. DOT in preparing its principles for reauthorizing federal highway, bridge, and transit programs. The secretary also discussed what he views as alternatives for funding the reauthorization bill since a gas-tax increase above the current level of 18.4 cents per gallon is considered off the table.

"There is no dispute in Washington about what needs to be done," LaHood said. "We know what needs to be done. There's only one problem: trying to find $500 billion."

That is the amount proposed last year by the House Highways & Transit Subcommittee. The multiyear reauthorization has not advanced in the full House Transportation & Infrastructure Committee, however, nor has it been considered by the Senate Environment & Public Works Committee. President Barack Obama in March signed into law the fifth short-term extension of the 2005 transportation authorization known as "SAFETEA-LU," which expired Sept. 30, 2009. The current extension expires at the end of this calendar year. (see March 19 AASHTO Journal story)

LaHood appeared Tuesday before the House Transportation & Infrastructure Committee, where he reiterated the need to utilize tolls, PPPs, and a national infrastructure bank instead of boosting the gasoline and diesel taxes to offset some of the $500 billion needed to fund the next multiyear reauthorization bill.

"We have 10% unemployment and people can hardly afford to pay for a gallon of gasoline," LaHood said, adding he couldn't imagine raising the gas tax anytime soon since so many families are presently struggling financially.

Rep. John Mica, R-Florida and ranking minority member of the committee, concurred with LaHood that the gas tax should not be raised. Mica expressed support for LaHood's plan to utilize other options to fund a new reauthorization bill.

"The next long-term reauthorization must consider a host of financing alternatives to help stabilize the Highway Trust Fund, which currently relies on the increasingly obsolete gas tax for funds," Mica said.

Funding for one of the administration's alternative transportation programs is already in jeopardy in Congress. Both the House and Senate appropriations committees last week refused to include a $4 billion National Infrastructure Innovation & Financing Fund the administration requested in the Fiscal Year 2011 transportation appropriations bill. (see July 23 AASHTO Journal story) The fund would offer grants and leverage state and private-sector dollars to help fund transportation infrastructure improvements.  

Democrats, Business Owners Express Support for Boosting Fuel Taxes

Some of the Democratic members of the committee disagreed with the Obama administration's opposition to raising the gas tax, which has not been increased since 1993. Many members of the committee said they feel alternative funding sources would not produce the increased investment needed in infrastructure.

"To say we are going to seriously address these issues through tolling, public/private partnerships, and an infrastructure bank is wrong," said House Highways & Transit Subcommittee Chairman Peter DeFazio, D-Oregon. "That's not going to get us there and I think that's really sad."

House Transportation & Infrastructure Committee Chairman James Oberstar, D-Minnesota, noted a budget-neutral gas-tax hike to pay for increased transportation investment was something that even conservatives such as former Presidents Dwight Eisenhower and George H.W. Bush had signed into law during their tenures.

Several business owners spoke to the committee after LaHood's presentation. Most echoed support for increasing the gas tax, contending that putting more tax revenue into the Highway Trust Fund is the best way to pay for surface transportation projects moving forward.

"It is difficult to consider raising the federal gas user fees," Bill Schneider, president and CEO of Knife River Corp., said on behalf of the National Stone, Sand, & Gravel Association. "But many of us in the industry believe it may be our only answer at this point to fund highway projects that are in serious need."

While not all the panelists felt increasing the gas tax was the best solution, they explained that with the deteriorating state of the nation's infrastructure, it is the only option available that could raise more revenue to fund projects immediately. PPPs and other alternatives were considered good options by the business owners, but ones that would only be beneficial in the long-term.

"The gas tax has really been the backbone to all of our infrastructure and our interstates in the past," said James Duit, president of Duit Construction Co., testifying on behalf of the American Concrete Pavement Association. "I am not necessarily for the gas tax, but I think that that is a solution -- an immediate solution."