/ Financial / Chamber’s Donohue Urges 25-Cent Fuel Tax Hike Over 5 Years, With Inflation Indexing

Chamber’s Donohue Urges 25-Cent Fuel Tax Hike Over 5 Years, With Inflation Indexing

Parul Dubey on January 24, 2018 - in Financial, News

​The CEO of the U.S. Chamber of Commerce proposed that Congress pay for modernizing roads, bridges and transit systems by raising the federal excise tax on motor fuels by 25 cents a gallon over five years and “indexed for inflation and improving fuel economy.”

CEO Thomas Donohue said those actions “would raise $394 billion over the next 10 years” for investments in surface transportation systems.

The business organization has long been on record favoring a hike in motor fuel fees to shore up the Highway Trust Fund over the long term and increase project investment, but this specific proposal comes as Congress is expected to take up a major infrastructure bill this year.

President Trump had campaigned on a pledge to offer a $1 trillion program to invest in a wide range of infrastructure categories, but his team has since said it would offer a plan that would spend $200 billion in federal funds and use that to leverage another $800 billion in spending by state and local governments and private investors.

After delaying to offer a specific plan throughout his first year as the president and Congress focused first on healthcare legislation and then tax cuts, administration officials have recently indicated they will unveil the infrastructure plan early this year. Meanwhile, some in Congress are drafting their own bills to offer once they see the president’s proposal.

Donohue in a Jan. 18 speech said polling shows that “by a 22-point margin – 50 to 28 [percent] – voters support implementing a federal fuel user fee, provided the money will go toward modernizing our infrastructure.”

He said this is a good time for Congress to take that step, since motorists are saving money at the fuel pump as vehicles increase their fuel efficiency “and when we can promise that by paying just a little more they can get better and safer roads.”

He said his idea would cost the average motorist about $9 more a month in fuel costs, while “our badly deteriorating roads” are costing drivers about $40 a month in extra vehicle maintenance and operating costs.

Donohue made the remarks at a Chamber event that included representatives from other industry groups including the American Association of State Highway and Transportation Officials. AASHTO President John Schroer, commissioner of the Tennessee DOT, was among the participants.

Schroer said that both bureaucratic federal oversight and lack of funding are impediments to improving the nation’s transportation system.

He said Congress can do more to streamline projects through the process required by some laws covering air and water quality or endangered species. And he stressed the need for lawmakers to come up with more federal funding to cover highway and transit programs starting in 2021.

Besides the fuel fee increase, the Chamber’s Donohue said Congress should also expand federal infrastructure loan programs at the U.S. Department of Transportation, and increase the use of grants and private activity bonds to spur more public-private partnerships to draw more private investment into projects.

In other areas, Donohue urged faster federal permitting of projects and efforts to expand the number of skilled workers for infrastructure.

In particular, he said that nearly 100,000 people who live here under special programs for temporary immigrants or children of undocumented residents work in the construction industry.

“Those builders could lose their status if Congress doesn’t act very soon,” he said, “and our economy would lose badly needed workers.”

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