Highway Reauthorization Stalls Over Funding

Despite the statements by House Transportation and Infrastructure Chairman James Oberstar, Ranking Member John Mica, Highways and Transit Subcommittee Chairman Peter Fazio and Ranking Member John Duncan that the four have agreed on the "major parameters of a surface transportation reauthorization bill which they hope will total between $450 and $500 billion for highways and mass transit, they can't agree on where the money will be coming from. Oberstar wants to increase fuel taxes, but increases in gas and diesel taxes are opposed by Mica and Transportation Secretary Ray LaHood. Although Oberstar promises passage of a bill in June, the dispute over fuel taxes versus mileage taxes as a funding mechanism makes that prediction optimistic. Current funding legislation expires at the end of September.

Gallons Or Miles?

House Transportation and Infrastructure Chairman James Oberstar announced Tuesday he wants to switch from federal per gallon fuel taxes to an automated system of federal mileage taxation based on miles driven over federal highways and other roads. The proposal calls for every vehicle to be equipped with a GPS device which would automatically record how far and over which roads the vehicle is driven, and automatically calculate the tax due.

While this proposal will be a bureaucratic nightmare for both vehicle owners and the government, it might be a good deal for the construction industry. Why? Because fuel taxes on the equipment which operates for weeks or months in the same location, such as cranes, concrete pumps, backhoes, graders and end loaders, will remain constant or be eliminated, while such equipment will pay little or no mileage tax. Of course, the amount of road building tax on your personal car would skyrocket. I doubt whether anyone at all has looked at this part of the equation.