Construction and transportation groups are joining in a push to block a Senate bill that would suspend the 18.3¢ per gallon federal gasoline tax temporarily and offset the revenue lost to the Highway Trust Fund through a transfer from the general fund.
The measure, introduced on Feb. 9 by Sen. Mark Kelly (D-Ariz.), would suspend the gas tax until Jan. 1, 2023. It does not apply to the federal tax on diesel fuel. Advocates of the plan see it as a response to high gas prices at a time of rising inflation.
[View draft bill text here.]
The American Automobile Association reported that the average U.S. price for regular gas was $3.514 on Feb. 16, compared with $2.519 a year earlier.
The proposal picked up five original co-sponsors, all Democrats: Maggie Hassan (N.H.), Debbie Stabenow (Mich.), Raphael G. Warnock (Ga.) and Catherine Cortez Masto and Jacky Rosen, both of Nevada. There have been no hearings or other action on the measure.
Senate Majority Leader Chuck Schumer (D-N.Y.) said of the gas tax proposal, “We’re having a caucus discussion on it. We haven’t yet taken a caucus position.”
Speaking at a Feb. 15 press briefing, Schumer added, “But it’s one of the things, of many things, that we're looking at in terms of reducing costs.” He also noted that some of the Senate bill’s supporters are “in tough races in 2022.”
Industry Groups Weigh In
"This is a real live issue," said Jay Hansen, executive vice president for advocacy at the National Asphalt Pavement Association, who added that construction groups are joining in a combined effort to stop the proposal.
Hansen said in a Feb.16 interview, "We just passed this gigantic infrastructure bill, [the Infrastructure Investment and Jobs Act], and now we’re going to turn around and starve it of the revenue that is needed to fully fund the bill."
Moreover, he said, “There’s no guarantee that the public would even see this savings," in the form of reduced prices at the pump.
Dave Bauer, American Road & Transportation Builders Association president and CEO, in a Feb. 9 letter to Schumer and Senate Minority Leader Mitch McConnell (R-Ky.), called the proposal “short-sighted and misguided.”
Michael Johnson, National Stone, Sand & Gravel Association president and chief executive officer, said in a Feb. 16 statement that the proposal "will increase debt financing by billions and bring greater uncertainty to the solvency of the surface transportation system.”
Industry officials are worried about the long-term effect of a gas tax suspension. Bauer said it “would establish a precedent that the federal gas tax should be suspended during times of economic distress or when fuel prices are deemed too high.”
That action, he added, “would surround the largest single source of revenue for federal highway and public transportation investment with disruptive uncertainty.”
The next step for the bill is unclear. Hansen says the proposal could come up for a vote during the debate over an expected omnibus appropriations package in March.
That spending bill would be key, possibly must-pass, legislation, because it would keep the government running through the end of the 2022 fiscal year. It thus is likely to attract all kinds of proposed amendments.
Hansen is concerned about the trust fund's outlook if a gas tax "holiday" were put in place. "We're gong to be constantly chipping away at it, chipping away at it....to what end? he asks.
How are we going to pay for our infrastructure programs in the future?" Hansen adds."You’ve got to look at the long game here."
For years, Congress propped up the Highway Trust Fund with tens of billions of dollars worth of general fund transfers, most recently with a $118-billion shift contained in the IIJA.
NSSGA's Johnson said, "Congress must get serious about reforms to funding the [trust fund] that are fair and applied to all transportation users, as doing so will bring greater certainty to fixing our nation's transportation networks."
