Gradually hike U.S. fuel tax to boost highway fund

By Tom Carper

Our roads, highways, bridges, and transit systems are in terrible shape in many parts of the United States, and they're getting worse. There's a solution to this problem that would boost economic growth, productivity, and competitiveness, and make life better for millions of Americans. But it requires that our politicians first be truthful about the problem.

Our public works are in such a dire state largely because the nation's Highway Trust Fund, which helps pay for transportation systems, has been broken since 2008. And to be blunt, Congress has failed to summon the courage to fix it. As a result, we've had to bail out the fund with 13 short-term patches over the past seven years, costing the treasury nearly $74 billion. We've paid for this with budget gimmicks and billions in increased borrowing, adding to our debt to countries such as China.

A bill recently passed by the Senate digs this hole deeper, co-opting nearly $50 billion in unrelated funds over 10 years to help pay for three years' worth of transportation projects. If it's enacted, the impact of this bill will be felt across the U.S. economy, raising the price of airline tickets, international travel and commerce, and home loans, among other things. Meanwhile, as Congress lurches from one crisis to the next without finding a stable source of transportation funding, the number of critical projects around the country being delayed or canceled continues to grow.

Last month, I introduced legislation with Sen. Dick Durbin (D., Ill.) to gradually increase the federal fuel taxes that have paid for much of our transportation system for decades. Starting next year, our proposal would increase the taxes by 4 cents a year for four years and then index rates to inflation, fixing this problem for decades.

It's true that there may be better ways to fund our nation's transportation investments. Some, like high-speed tolling, should be expanded where feasible. Others, like mileage-based road user charges, show promise but require more research.

In the meantime, the fastest, fairest, and most efficient way to solve this problem is to increase federal fuel taxes. Those taxes - set at 18.3 cents per gallon for gas and 23.4 cents per gallon for diesel - haven't changed in more than 20 years. Over those decades, inflation has eroded the purchasing power of the tax revenue, while the costs of concrete, asphalt, steel, and labor have all climbed.

For the average driver, our plan wouldn't be costly. After the fourth year, it would add up to only an additional $2 a week - roughly the cost of a cup of coffee. There's nothing unfair about asking the people and businesses who use our roads to help pay for them. And the United States has by far the lowest combined state and federal taxes on gas and diesel fuels of any developed nation. With gas prices near record lows and oil production in the United States near record highs, it's clear that now is the time to act.

The benefits are clear. Our economy relies on efficient transportation systems. Better roads, safer bridges, and more efficient transit make American businesses, large and small, more competitive and help workers be more productive. In fact, the McKinsey Global Institute recently estimated that substantially increasing transportation investment to meet our country's needs could add 1.5 percentage points to annual economic growth and create 1.8 million jobs.

What's more, the cost of doing nothing is surprisingly high. Our dilapidated roads speed depreciation of the value of our cars and trucks, and increase what the average driver spends on auto repairs by $516 each year, according to TRIP, a transportation research group. The Texas A&M Transportation Institute found that the average commuter wastes 42 hours each year stuck in gridlock - worth a week's salary.

Some say such a tax increase amounts to political suicide. They're wrong. In recent years, more than half a dozen states, both red and blue, have approved modest increases in transportation user fees to make badly needed investments. Ninety-five percent of the Republican legislators who voted for these increases and nearly 90 percent of the Democrats won reelection in 2013 and 2014.

Our current policy of bailouts and budget gimmicks isn't working. America's leaders must be honest with people about what our transportation system needs and the benefits of making the investments that will truly fix the problem. Gradually increasing fuel taxes by a modest amount is the most responsible choice for solving a problem that has confounded us for far too long.

U.S. Sen. Tom Carper (D., Del.) wrote this for Bloomberg View. press@carper.senate.gov