Railroad, trucking groups want higher federal gas tax

WASHINGTON-As President Donald Trump and lawmakers in both parties roll out infrastructure plans, no one seems to be willing to consider the hottest, most vexing piece of that legislative puzzle: raising the federal gasoline tax.

Suddenly, the effort has an important new ally: the nation's railroads.

Motorists and truckers pay the same 18.4 cents and 24.4 cents a gallon, respectively, they did when Bill Clinton was president from 1993 to 2001. But those pennies don't buy what they did in 1993.

The tax was enough to pay for the federal share of building and maintaining the nation's roads, bridges and transit systems. But every year since 2008, when the shortfalls started, lawmakers have punted on higher taxes. Instead, they've transferring ever larger amounts of general revenues into the Highway Trust Fund to keep it running.

As of last year, Congress had poured $143 billion into the fund's depleted coffers since the shortfalls began.

Thanks to a bill Congress approved in 2015, the fund is solvent through 2020. The Congressional Budget Office projects an average annual shortfall of $21.2 billion from 2021 to 2026.

For years, coalitions of business groups, construction companies and even truckers have pleaded with members of Congress to increase the gas tax, but to no avail. President Barack Obama was averse to raising fuel taxes.

Any tax increase faces staunch opposition in the Republican-controlled Congress.

On Wednesday, however, BNSF Railway Executive Chairman Matt Rose told a Senate Commerce Committee panel that by not increasing highway user fees on trucks, lawmakers were effectively giving a back-door subsidy to rail's biggest customer, which also happens to be its biggest competitor.

Rose said the "free" money Congress had been giving to the trucking industry in the form of general funds had eroded railroads' cost advantage in long-haul freight movements.

"Moving away from the trucking industry paying its fair share in usage taxes will result in more trucks on the highway system," Rose testified.

While the rail industry's trucking counterpart, the American Trucking Associations, has supported an increase in federal motor fuel taxes, spokesman Sean McNally said the entire supply chain benefited from a fully funded Highway Trust Fund, even with an annual infusion of general revenues.

According to the American Association of State Highway and Transportation Officials, a 10-cent increase in the gas tax would, for now, plug the hole in the Highway Trust Fund.

McNally rejected Rose's assertion that the transfers amount to an unfair subsidy for trucks.

"We don't believe any mode should be subsidized, including the railroads, which receive federal money but pay no user fee," McNally said.

Since 2008, the railroad industry has spent more than $200 billion of its own capital on improvements to the rail system, according to the Association of American Railroads, the industry's principal advocacy group in Washington.

Railroads do receive some federal support. The Obama administration spent more than $600 million in economic stimulus funds on projects around the country that boosted freight rail.

Obama's high-speed and intercity passenger rail improvement program spent another several hundred million dollars on projects across the country that boosted freight.

Trump has not been specific about how he'd pay for his proposed $1 trillion infrastructure investment, though he has said he wants to tap the potential of private-sector capital.

Other proposals dodge the politically tricky question of whether to raise the gas tax.

For example, Sen. Deb Fischer, a Nebraska Republican who chairs the Senate Subcommittee on Surface Transportation, proposes to divert $21.4 billion annually in revenue collected by Customs and Border Protection to cover the Highway Trust Fund shortfall.

Fischer wrote that her proposal "will address the near-term solvency of the Highway Trust Fund without raising taxes on Americans."

However, the effect on drivers of raising the gas tax a dime would be relatively modest. It would translate into an increased cost to the average driver of about $1.15 a week.

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