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2009 Transportation Bill

LaHood to Congress: It’s Time to Talk About a Gas Tax Increase

As Congress maneuvers to end the political impasse over the next long-term national transportation bill, lawmakers are going to have to debate an increase in the federal gas tax, Transportation Secretary Ray LaHood said today.

Trans_Secretary_Ray_LaHood_Discusses_Cash_Jx_HxR08cPwl.jpgTransportation Secretary Ray LaHood (Photo: Getty Images)

In his remarks at a Fort Worth transportation meeting, first reported by the local Star-Telegram, LaHood stopped far short of reversing the White House's stated opposition to raising the federal gas tax, which has remained at 18.3 cents per gallon since 1993.

But LaHood appeared to edge the door open to a solution to the nation's transportation funding crisis -- provided that lawmakers swallow their re-election concerns and acknowledge that the current gas tax is no longer raising enough money to run an effective system.

Here's what LaHood said today (emphasis mine):

To index the federal fuel tax [to inflation], that's something Congress is going tohave to decide. As we get into the reauthorization bill, the debatewill be how we fund all the things we want to do. You can raise a lotof money with tolling. Another means of funding can be theinfrastructural bank. You can sell bonds and set aside money for bigprojects, multi-billion-dollar projects. Another way is [charging motorists for] vehicle miles traveled. The idea of indexing thetaxes that are collected at the gas pump is something I believeCongress will debate. When the gas tax was raised in 1992 or 1993, inthe Clinton administration, there was a big debate whether it should beindexed. At that time, they thought there'd be a sufficient amount ofmoney collected. Now we know that isn't the case. That is one way tokeep up with the decline in driving, and more fuel-efficient cars.

Another fact not mentioned by LaHood: Transportation construction inflation has increased at a rate twice as high [PDF] as the Consumer Price Index, the Labor Department's traditional method of measuring price hikes for household goods. That means that raising the federal gas tax to appropriately reflect the cost of infrastructure improvements would be even more challenging than many in Washington now admit.

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