LAW: Democratic congressman unveils bill for one-penny increase in gas tax

March 23, 2017

Congressman DeFazio introduced legislation to raise the gas tax by 1 cent per year

Rep. Peter DeFazio (D-Ore.), the top Democrat on the House Transportation and Infrastructure Committee, unveiled new legislation Wednesday that would raise the gas tax by approximately 1 cent per year, to generate about $500 billion for revitalizing U.S. roads, bridges and transit systems over the next 30 years.

Hiking the federal gasoline tax, which has not been done in over 20 years, is a hot-button issue in Congress, where agreeing on ways to pay for transportation upgrades has long remained elusive.

But DeFazio said he has growing support behind closed doors for this gas tax increase, especially with the Trump administration putting a greater spotlight on the nation’s crumbling infrastructure.

The bill would index the gas and diesel tax to the cost of constructing transportation projects and to the reduction in motor-fuel usage, which would approximately translate into a 1-cent increase every year. The hike would be capped at 1.5 cents annually.

The Treasury Department would use that new revenue to issue and pay back 30-year “Invest in America Bonds,” and deposit the cash from those bond sales into the ailing Highway Trust Fund. The measure, which would lead to a 30% boost in infrastructure investment every year, would ensure that the money is invested proportionally among highway, transit and safety programs.

At least at the local level, the idea appears to have traction. Seventeen states have raised their gas taxes since 2013, including nine red states. Those increases range from 1 cent to 27 cents.