Chao: Federal gas tax an infrastructure funding option

Dive Brief:

In a speech to Louisville, KY, business executives and local officials last week, Department of Transportation Secretary Elaine Chao said the administration has not discounted any infrastructure financing options, including a hike in the federal gas tax, according to WDRB.
The federal gas tax has held at 18.4 cents per gallon since 1993, even though it feeds the Highway Trust Fund (HTF), which helps finance state surface transportation projects. Chao said this would be the easiest way to raise money for highway projects, but acknowledged that a higher gas tax would have a negative impact on low-income motorists.
Chao reiterated that an integral part of President Donald Trump's $1 trillion infrastructure plan is the use of public-private partnerships, although she said they weren't appropriate for every project.

Dive Insight:

In March, Rep. Peter A. DeFazio, (D-OR), introduced a bill that would increase the federal gas tax by one cent per year. DeFazio said the move would add approximately $17 billion annually to the HTF. So far, lawmakers have been hesitant to act on that proposal or any other that would raise the tax.

However, state legislators are not as gun-shy when it comes to raising taxes to pay for infrastructure upgrades and repairs. California raised its gas tax earlier this year by 12 cents per gallon to help pay for a $52 billion state infrastructure program.

According to state estimates, California has a backlog of about $130 billion of infrastructure repairs, and the American Society of Civil Engineers said that approximately 50% of California roads are in poor condition, according to The Hill.

Indiana, too, raised its gas tax — in that state's case by 10 cents per gallon to help pay for a $4.7 billion infrastructure program.

The latest state to announce a gas-tax initiative is Oregon. Earlier this month, the state's House of Representatives passed a $5.3 billion transportation bill that will pay for new construction, as well as repairs to the state's roads and bridges, by implementing a gas-tax hike. The bill also includes a sales tax on vehicles and bicycles.