State and Local Lawmakers Pitch How to Pay for a Big Infrastructure Package

WASHINGTON — State and local officials continued to lobby federal lawmakers Thursday on hiking the gas tax in order to help close the nation’s $2 trillion infrastructure investment gap over the next decade.

That number comes from the American Society of Civil Engineers, with surface infrastructure accounting for more than $1 trillion of the shortfall. The group estimates $249 billion is necessary to shore up water and port-related infrastructure, while airports need about $100 billion in investment.

The bipartisan National Governors Association has not taken an official position on increasing the gas tax from 18.4 cents per gallon, or 24.4 cents per gallon for diesel, for the first time in 26 years. But Minnesota Gov. Tim Walz joined Los Angeles Mayor Eric Garcetti, both Democrats, in appearances Thursday before Congress supported a phased approach to fixing the federal Highway Trust Fund.

The Highway Trust Fund is sustained by the gas tax, which hasn't been increased since 1993. Without an injection of billions in additional dollars annually on top of expected user fee revenue, the fund will be broke by 2022, according to the Congressional Budget Office.

Like many others who have looked at the country’s infrastructure needs, Garcetti emphasized that a gas tax increase would just be a first step. Eventually, he said the country would need to transition to what is being called “vehicles miles traveled,” or a way of taxing how much a car actually drives on the road.

“I would put in a gas tax, find a formula to get a pilot in for vehicle miles traveled and then wean from the first to the second over time as we electrify every vehicle in this country, which is going to happen,” Garcetti told the House Committee on Transportation & Infrastructure.

State and local officials in recent weeks have repeatedly underscored that getting Congress to pass an infrastructure package is their main priority. Despite some support from President Trump—who referred to the country’s “crumbling infrastructure” briefly in his State of the Union address this week—it is not yet clear what the path forward for a major plan would be. Trump did not outline a particular agenda during his speech, while deep philosophical differences remain in Congress about how to pay for any package. Republican lawmakers in particular have been resistant over the past two years to calls to increase the gas tax.

Both the U.S. Conference of Mayors and National League of Cities support increasing the gas tax, which Garcetti estimated would be needed another five to 10 years.

Vehicle miles traveled, or VMT, measures a vehicle’s distance traveled on public roads during a set period, in order to charge drivers a user fee for wear and tear on driving infrastructure. The measure would also capture electric vehicles, whose drivers currently avoid paying the gas tax that feeds the Highway Trust Fund.

Some Republican lawmakers are reluctant to increase the gas tax and risk losing reelection—looking to VMT instead.

“I see this as the best way to ensure that everyone contributes to the trust fund,” said U.S. Rep. Sam Graves, a Missouri Republican and committee ranking member.

Minnesota has raised its gas tax previously to bolster the state Highway Trust Fund, and Walz ran on a platform that included increasing the tax again. As a result, he faced Republican attack advertisements during his campaign but said his poll numbers improved while the ads ran “because the public was saying, ‘Do something.’”

Walz also supports a move to VMT over time.

“If you do it and you go big, it sends such a strong signal,” Walz testified.

Any gas tax must be indexed to the cost of living this time so it increases naturally, said Ray LaHood, co-chair of Building America’s Future and a former transportation secretary under President Obama. He urged Congress to get back into the business of infrastructure building because states like his home state of Illinois are broke, and to pass a bill before the 2020 campaign cycle begins and kills any chance of consensus.

The process starts with Congress getting a signal from the White House on whether it’s open to increasing the gas tax, implementing VMT or both, LaHood said.

“I think the House has the ability to pass a big, bold plan. I think the Ways and Means Committee will try and find the money for you,” LaHood said. “But if President Trump is not with you on this, then it’s going to be very difficult to pass in the Senate.”

U.S. Rep. Mark Meadows, a North Carolina Republican, expressed interest in holding “one, tough vote now” on the gas tax and VMT, before Congress misses its window for passing an infrastructure bill.

But he wanted to know from NGA how many governors are actually willing to increase the gas tax before he takes a position.

“The public will pay for it if they know it’s going into highways and transportation,” said U.S. Rep. Don Young, a Republican from Alaska.

Voters in local and state elections have supported tax increases to pay for road and transit improvements.

In 2017, 72 percent of Los Angeles County voters approved a one-cent sales tax increase predicted to generate $120 billion for transit and create 787,000 jobs over 40 years.

Phoenix, absent any federal dollars, approved a $32 billion investment in everything from light rail to walkability, said U.S. Rep. Greg Stanton, an Arizona Democrat and the city’s former mayor.

Similar “lasting revenue streams” must be created at the federal level, Garcetti said.

“We’re not coming here with empty hats in hand; they’re at least half filled,” Garcetti said. “We’re asking you to fill them to the top.”

Garcetti further encouraged lawmakers to reward infrastructure innovations like electric scooters and hyperloop, which is being developed in Los Angeles by the Boring Company. China is electrifying entire bus fleets in cities like Shenzhen—dictating the market—and is among countries planning infrastructure 50 to 100 years in the future while the U.S. struggles to pass a single bill, he added.

Graves, too, expressed concern the U.S. was falling behind on infrastructure technology and is among Republicans lobbying to streamline environmental reviews that slow projects down.

Public-private partnerships, or P3s, have proven critical to Los Angeles establishing 15 bus rapid transit lines without giving away public assets, Garcetti said. But he emphasized these partnerships aren’t viable in the water and stormwater infrastructure space because it’s difficult to secure private funding for what’s viewed as a public health issue.

U.S. Rep. Peter DeFazio, an Oregon Democrat and committee chairman, is adamant that increased federal infrastructure investment be part of the equation, lest the government continue to defer maintenance and exacerbate long-term costs when things begin to fail.

Were the Hudson River rail tunnels to collapse—the North River Tunnel having been seriously damaged during 2012’s Superstorm Sandy—it would cost $100 million a day in lost productivity, DeFazio said.

“We cannot devolve the duty to have a modern, 21st-century, resilient transportation system to compete in the world economy and move people and goods more effectively on a state-by-state basis,” DeFazio said. “We have to be there with them and coordinate it and invest in it.”