Republicans who opposed previous efforts to increase the gas tax or a move to a mileage fee argued it disproportionately affects lower income people, said Greg Regan, president of the AFL-CIO’s Transportation Trades Department. Now, it’s Democrats making that argument and the GOP that’s suggesting user fees should be used to pay for roads and transit.

Ed Mortimer, the U.S. Chamber of Commerce’s vice president of Transportation and Infrastructure, attributed the shifting position among Republicans on user fees to their being accustomed to seeing electric vehicles as a Blue State phenomenon. So, he said, they ignored warnings about a gas tax shortfall—until Republican-led states began seeing their fuel levies decline.

“Some Republicans who maybe have been reticent about user fees, when it comes to a user fee or corporate tax increase, maybe they’ve gotten a different perspective,” Mortimer said.

Electric Vehicles
Sam Graves of Missouri, the top Republican on the House Transportation and Infrastructure Committee, has argued a VMT could easily be implemented by using a formula assessed at the gas pump similar to how the fuel tax is paid.

Such a fee would also help shore up highway funds. Gas and diesel taxes leave out a whole new category of motorists on the road—electric vehicle drivers. Backers say it would help close the gap in federal highway funding. The gas tax brings in $34 billion per year while federal spending on highways and public transportation has topped $50 billion annually.

“The suggestion is, middle class workers are going to pay what mega-corporations will not,” Oregon Democrat Ron Wyden, chairman of the Senate Finance Committee, said during the panel’s hearing on funding infrastructure in May. “That’s not a step toward fairness.”

Wyden said he would look at any gasoline tax indexing proposal such as the one Romney said was under consideration before commenting. He pointed out that Biden has a “reservation about this as a regressive tax” and highlighted the Democratic view that corporations are underpaying taxes now.

Senator Chuck Grassley, a veteran Iowa Republican, remarked Thursday about indexing the levy that “it’s better than increasing the gas tax and it has a better chance of getting done.” He also that if that had been done in the early 1990s “we wouldn’t be in the situation we are in now.”

While highway funding is expected to be part of the infrastructure plan, Congress is still working on a standalone bill to take the place of a five-year, $305 billion act that was extended until Sept. 30. The House passed a five-year, $494 billion surface transportation bill in July 2020, but the measure has not been approved by the Senate. Democrats in the lower chamber have introduced a $547 billion surface transportation bill. House Republicans countered with a smaller $400 billion measure.

Former U.S. Transportation Secretary Rodney Slater, who served in the Clinton administration, said the last gas tax increase, to 18.4 cents a gallon from 14 cents a gallon in 1993, was tied to a federal deficit-reduction effort. It passed with no Republican votes.

It wasn’t until 1998 when the extra 4.3 cents per gallon was dedicated to the Highway Trust Fund, Slater said.

Slater said consideration of potential replacements for the gas tax, including a mileage fee, goes back as far as the Clinton years. He cited the creation of the Transportation Infrastructure Finance and Innovation Act program and the Railroad Rehabilitation and Improvement Financing in 1998, in addition to the early VMT explorations.

“We tried to go for a VMT provision,” he said. “We recognized we couldn’t solely rely on the gas tax to fund transportation. We were beginning to explore innovative financing techniques.”

—With assistance from Erik Wasson and Laura Litvan.

This article was provided by Bloomberg News.

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