Tax reform proposal supportive of transportation infrastructure
November 11, 2010The National Commission on Fiscal Responsibility and Reform (the deficit commission) released a proposed tax reform plan on Nov. 10, highlighting the need to invest in transportation infrastructure that would promote economic growth and keep America competitive.
The proposal includes a gradual increase up to 15 cents per gallon in the gasoline user fee beginning in 2013. It would be dedicated to ensuring that the trust funds are fully funded, eliminating the need for further general fund bailouts.
The tax reform plan follows a Nov. 8 letter from Sens. George V. Voinovich, R-Ohio, and Tom Carper, D-Del., urging the commission to consider raising the gas tax to help improve the nation’s infrastructure.
The Highway Trust Fund needs $34 billion over the next six years to maintain the nation’s roads, and Voinovich and Carper urged the co-chairmen, Erskine Bowles and Alan Simpson, to consider raising the gas tax 25 cents over a three-year period.
Leaders from a diverse coalition of transportation interests released a statement on Nov. 10 supporting the commission’s proposal. It read:
“We applaud the draft proposal released by the National Commission on Fiscal Responsibility and Reform co-chairs to increase the gas tax by 15 cents to support vital transportation infrastructure improvements. This preliminary recommendation is bold, but necessary, and our organizations urge commission members to support its adoption as part of its report to Congress and the president.
“This proposal recognizes the integral relationship between improving transportation infrastructure, economic health and fiscal responsibility. If enacted, it will help prevent economically devastating cuts in federal infrastructure investment and remove the primary obstacle to passage of a multi-modal surface transportation reauthorization bill.
“The issue of transportation investment is directly linked to balancing the federal budget. Without new Highway Trust Fund revenue, policymakers will be forced either to impose highway and transit program cuts that would reduce payrolls and impede economic growth; or add an estimated $34 billion over the next six years to general fund spending. Either outcome undermines efforts to balance the budget. It is also important to recognize that a small number of transportation programs are currently funded with general funds, and those programs meet important needs and should be continued.
“We are grateful for the leadership of Sen. Tom Carper, D-Del., and Sen. George Voinovich, R-Ohio, on this issue and look forward to working with the commission, Congress and President Obama to resolve our federal budget challenges and support vital infrastructure investment.”
Fourteen of eighteen commission members must approve a recommendation for inclusion in the final report, which will be sent to Congress next month, NSSGA noted in its Special Legislative Update. Congress must still act on any such proposals through the normal legislative process.
Please send any technical comments or questions to our webmaster.