Report: Feds will allocate more transportation funds to states that raise taxes to pay for infrastructure
- States that raise taxes, according to unnamed White House aides, or come up with other new sources of revenue to pay for infrastructure projects will be eligible to compete for additional federal funding, according to The Mercury News.
- Sources said this latest funding scheme from the Trump administration would raise $800 billion needed to reach the president's infrastructure program goal of $1 trillion. However, Republicans, they said, could balk at a plan that requires mining the needed funds from taxpayers either through new gas taxes, tolls or other user fees.
- CNBC reported that an infrastructure bill would have to wait until 2018, most likely behind entitlement reform. In 2017, items higher than infrastructure on Trump's priority list were repeal of the Affordable Care Act, tax reform, a crackdown on illegal immigration and construction of the U.S.–Mexico border wall. None of these initiatives have been completed.
There's no indication whether the new plan from the Trump administration would supplement or replace a suggested seven-cent increase to the federal gas tax, a strategy that one of the president's advisers reportedly shared with House legislators in October. The federal gas tax funds the Highway Trust Fund (HTF), which allocates money to the states for transportation infrastructure projects. According to the Congressional Budget Office, the HTF will be completely tapped within 10 years if it can't tap into new revenue streams.
When officials at any level of government suggest raising taxes or implementing other forms of fee collection to help pay for infrastructure upgrades or repair, the usual accompanying assumption on the part of lawmakers is that there will be significant pushback from voters against anyone proposing such a move. However, recent polls have suggested otherwise.
A Bloomberg poll this year showed that more than 50% of Americans would get behind higher gas taxes as long as such a move resulted in improvements in local roads. Another survey undertaken by HNTB and analyzed by Reuters determined that 75% of Americans would be willing to pay more taxes and tolls to improve the state of highways, bridges and other infrastructure.
Some states have already raised taxes and other fees to help pay for infrastructure needs. Probably the biggest such program is California's $52 billion initiative; lawmakers increased the state's gas tax by 12 cents per gallon and raised vehicle license fees in order to fund it.
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