Rep. Shuster introduces infrastructure plan that would eliminate fuel taxes in 2028
July 25, 2018
Rep. Bill Shuster, R-Pa., introduced on July 23 a discussion draft of an infrastructure plan that would implement a fuel tax increase in the short term while planning to eliminate fuel taxes in a decade.
Shuster, the House Transportation and Infrastructure Committee chairman, addresses the Highway Trust Fund at the top of his plan. Under his plan, the Highway Trust Fund solvency issue will be addressed using a fuel tax increase. More specifically, diesel’s federal tax will increase by 20 cents over three years. Gasoline tax will go up by 15 cents.
After 2021, fuel taxes will be adjusted to inflation until 2028. On Sept. 30, 2028, those user fees will drop to zero. Alternative fuels have similar increases, including compressed natural gas.
What will make up for those fuel user fees? Possibly a per-mile tax.
Shuster’s plan calls for a per-mile user fee pilot program. Also known as a vehicle-miles-traveled tax, the pilot program will be similar to those conducted in California, Colorado and Oregon but at the national level.
However, it is not clear if a per-mile fee will replace the fuel tax. Rather than come up with a plan right away, Shuster wants to establish a Highway Trust Fund Commission. Consisting of 15 members, the commission will be tasked to identify at least one recommendation to achieve long-term solvency of the Highway Trust Fund that does not include fuel taxes. The report would be due by Jan. 15, 2021.
New taxes aimed at users currently not paying into the system will help foot the bill. The plan calls for a 4.3-cent tax per gallon of diesel on certain passenger trains. Additionally, Shuster wants to levy a tax on electric vehicle batteries at 10 percent of the manufacturer sale price. Even bicycles will be taxed. The draft proposes a 10 percent tax on bicycle tires greater than 26 inches in diameter.
A national infrastructure investments program will be established under Shuster’s plan. The program will grant awards on a competitive basis, with $3 billion in funding available through 2023. Deviating from President Donald Trump’s proposal of reducing the federal government’s share to approximately 20 percent, the program will cap the federal share of eligible projects at 80 percent. Keeping with Trump’s focus on rural areas, at least 30 percent of program funding must go to rural areas. Federal share of programs in rural areas may exceed 80 percent.
Also consistent with President Trump’s initial plan, Shuster wants to set policies in place to speed up projects. One section forces the Department of Transportation to approve decisions for projects within two years. Another section will expedite the environment review process.
It is worth noting that Shuster’s plan is only a discussion draft, meaning these are ideas that Congress can toss around for a more concrete infrastructure bill.
“This discussion draft does not represent a complete and final infrastructure bill,” Shuster said in a statement. “It is meant to reignite discussions amongst my colleagues, and I urge all members to be open-minded and willing to work together in considering real solutions that will give America the modern day infrastructure it needs.”
Some are skeptical about how far this draft will go. Collin Long, director of government affairs for the Owner-Operator Independent Drivers Association, pointed out that Shuster is retiring from Congress after his current term is up, suggesting he is releasing a plan he promised before time runs out.
Shuster’s plan was released shortly before the House leaves for a month. Long noted that this a period when bills are known to die. Furthermore, many in Congress are seeking re-election in November. With several controversial proposals, including a typically unpopular fuel tax increase, Long predicts those on the campaign trail may ignore the plan to avoid controversy.