Former DOT Secretary LaHood: ‘Let’s Raise the Gas Tax’

Courtesy of CBS News: Former U.S. Transportation Secretary Ray LaHood says unless Congress acts, the Highway Trust Fund will run out of money at the end of fiscal 2014 — “because people are driving less, driving more fuel-efficient cars, and the gas tax hasn’t been raised in many years.”

Monies in the Trust Fund fund — derived mostly from excise taxes on gasoline and other fuels — fund the federal government’s highway and mass transit projects.

“And if Congress doesn’t step up and either increase the gas tax, they will have to take the money out of the general fund. And the point is that the gas tax has not been raised since ’93,” LaHood told Fox New’s Neil Cavuto on Monday.

He said if the gas tax had been indexed to inflation in 1993, “we wouldn’t be talking about this. My idea is, let’s raise the gas tax.”

The Congressional Budget Office reported last July that since 2000, spending from the Highway Trust Fund has generally outpaced revenue collections, so fund balances have fallen over that period.

“The current trajectory of the Highway Trust Fund is unsustainable,” the CBO report said. Starting in fiscal year 2015, it said, the trust fund will have insufficient resources to meet all of its obligations, resulting in steadily accumulating shortfalls.

But LaHood said the United States needs the money to improve its infrastructure. President Obama also has called for “infrastructure “investments” to put Americans back to work.

“We built the interstate with the Highway Trust Fund,” LaHood said on Monday. “We built the Hoover Dam. We built the Golden Gate Bridge. We’re number 16 right now in terms of infrastructure. We used to be number one.”

Neil Cavuto noted that billions of dollars in tolls and fees and state and local gasoline taxes also are earmarked for infrastructure improvements, in addition to what the Highway Trust Fund provides: “Methinks that someone is absconding with a lot of that money,” he told LaHood.

“Well, I — I think that’s a little ridiculous to say that,” LaHood responded. “Taxes that are collected at the local and state level go for local and state roads. Taxes that are collected for tolls go to maintain the toll roads.”

And what about the billions of dollars in stimulus funds that went to road projects across the country?

“Yes, $48 billion,” LaHood said. “I’m very proud, Neil, that while I was at DOT, we spent $48 billion. We put 65,000 people to work doing 15,000 projects. You never heard any bad stories about the money being misspent.

“America is one big pothole, Neil. If we don’t come up with the money, we’re in no way, shape or form going to have the money to fix up the potholes.”

According to LaHood,  “We need people to step up, provide some leadership, and come up with the money. That’s what we have always done in America.”

The July 2013 CBO report noted that since 2008, Congress has avoided shortfalls in the Highway Trust Fund by transferring $41 billion from the Treasury’s general fund to the Trust Fund. An additional $12.6 billion is supposed to be transferred in 2014.

The report said lawmakers “could address shortfalls by substantially reducing spending for surface transportation programs, by boosting revenues, or by adopting some combination of the two approaches.”

Notably, the CBO report also mentions a congestion tax, which means highway users would pay tolls that vary, depending on traffic volume: “Implementing such a user fee would reduce demand for future spending by providing an incentive to use those roads less during congested periods,” the CBO said.

Category: General Update