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House Ways and Means Democrat Expected to Introduce Gas Tax Increase Soon

 

The week of January 21, Rep. Earl Blumenauer (D-OR), who currently sits on the House Ways and Means Committee, indicated that he plans to introduce legislation that calls for a five-cent gas tax increase per year starting in 2020. After 2023, the gas tax would go to 43.3 cpg and diesel at 49.3 cpg based on a draft bill circulating from his office. Details remain unclear at this time on whether the draft bill would tax all vehicles equally including electric vehicles. Introduction of the bill will likely serve as a marker for future transportation policy.

The current 18.4 cent-per-gallon federal gas tax has been the main source of transportation funding for decades and it has not been increased since 1993. If the gas tax were to have been indexed to inflation, drivers would be paying over 30 cpg for gasoline.

Last Congress, outgoing House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA), released draft legislation which called for phasing in a 15-cent gasoline and 20-cent diesel tax increase over three years to ensure that the Highway Trust Fund (HTF) stays solvent over the next decade. After three years, the taxes would be indexed to inflation. The draft legislation also included a 10 percent user fee on electric batteries and adult bicycle tires and would also eliminate full and partial fuel tax exemptions for public transit and intercity buses. Furthermore, the legislation would create a voluntary pilot program to test the feasibility of a vehicle miles traveled (VMT) to replace the federal motor fuels excise tax. Ways to track mileage would possibly include: phone apps, in-car diagnostic systems, etc. By having a VMT and/or the provision included in the draft bill that would tax electric vehicles (EVs), the legislation is a conversion starter to ensure that all highway users pay their fair share. Currently, EVs are exempted from paying any type of highway tax. 

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