States Mull Tax Hikes As Congress Dithers Over Highway Bill
State governments face mounting pressure to raise gas taxes as consensus continues to elude Congress with less than a month until federal highway funding runs out.
Members of Congress are increasingly pessimistic they will reach agreement on a long-term transportation bill before the May 31 deadline, with some resigned to yet another temporary patch keeping the Highway Trust Fund solvent, The Washington Post reported Thursday.
Due to factors ranging from inflation to the improved fuel efficiency of vehicles, the 18.4 cent-per-gallon federal gas tax has for years produced insufficient revenue to support transportation disbursements, forcing lawmakers to supplement the HTF from the general fund. The most recent extension required an $11 billion transfer. (RELATED: As Oil Prices Fall, Lawmakers Propose Higher Gas Tax)
Lawmakers from both parties have proposed a variety of measures to provide sustainable funding over the next five to six years, but should the current deadlock persist, lawmakers will most likely resort to a temporary infusion of cash for the thirty-third time in the last six years.
Confronted with this morass, states are beginning to take initiative on their own to raise taxes and eliminate low-priority projects, lest the federal impasse continue to stymie their long-term planning. (RELATED: Repatriation Holiday Won’t Fix Highway Funding Shortfall, Critics Say)
In Georgia, Republican Gov. Nathan Deal signed a transportation bill Monday that provides nearly $1 billion in annual funding through a combination of new fees and higher gas taxes, according to The Atlanta Journal-Constitution.
In addition to raising gas taxes by 6 cents per gallon, the new law also imposes a hotel fee of $5 per night, a $200 annual fee on noncommercial electric vehicles ($300 for commercial), and a $50-$100 fee on heavy trucks.
Meanwhile, the Missouri Department of Transportation released a new five-year plan this week that calls for scaling back construction in anticipation of a massive decrease in funding, Missourinet reports. The DOT projects that the state’s transportation budget will decline from $600 million in 2016 to just $325 million in 2017, forcing it to abandon new construction in order to keep up with necessary maintenance.
Democratic Gov. Jay Nixon has called on the legislature to come up with a solution before the end of its current session, though, and lawmakers are reportedly considering a proposal to meet that challenge by raising gas taxes. (RELATED: Mike Lee Would Send Highway Funds to the States)
Even local governments may start getting into the act. According to The Los Angeles Times, the Los Angeles County Metropolitan Transportation Authority released the results of a poll Thursday in which more than two-thirds of residents said they would support a ballot measure raising sales taxes in order to fund road and rail projects.
Such a measure would require support from 67 percent of voters, but advocates were encouraged by the poll results. When no background information was provided, 70 percent of respondents expressed some degree of support, and the figure rose to 79 percent when pollsters provided the full details.
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