With federal highway funding expiring May 31, seems just about everyone in Washington’s got a formula to replace the gas tax. Here's a closer look at four of the proposals.
Rebuild America Act Sen. Bernie Sanders (I-Vt.) is introducing a bill to spend $1 trillion over the next five years on transportation infrastructure upgrades. In an op-ed in The Hill, he stated:
A $1 trillion investment would put 13 million people to work repairing the backlog of infrastructure projects all across this country. Moreover, each project would require equipment, supplies and services, and the hard-earned salaries from the jobs created would be spent in countless restaurants, shops and other local businesses. And, all of this economic activity would generate new tax revenues to pay for the services that the American people expect and deserve.
While there's widespread concurrence that infrastructure improvements are a necessity, there's little agreement on how best to fund the work. Sanders' proposal does not offer a concrete solution.
Infrastructure 2.0 In his proposed legislation, Rep. John Delaney (D-Md.) wants to use revenue from corporate tax reform to pay for road and transit projects. According to The Hill:
Delaney's bill would pump $150 billion into the Department of Transportation's Highway Trust Fund, which is normally filled with gas tax revenue, over the next six years. The money would be used to close a shortfall in federal transportation funding that is estimated to be about $16 billion per year.
The measure would also set aside $50 billion to fund the creation of a national infrastructure bank that Delaney's office said would attract $750 billion in private investment in U.S. transportation projects.
Delaney believes this is a more viable funding solution that raising the gas tax, which transportation advocates favor, but Republicans generally oppose.
Invest in Transportation Act of 2015 Expected to be put forth by Sens. Barbara Boxer, D-Calif., and Rand Paul, R-Ky., this legislation would reduce the federal tax on offshore corporate earnings returned to the U.S., thereby encouraging corporations to "repatriate" their income, which would then be used to fund infrastructure projects. According to Bond Buyer:
The repatriation legislation would allow multinational corporations to voluntarily return their foreign earnings to the United States over the next five years at a tax rate of 6.5% rather than the current 35%. The lower rate could be applied only to repatriations that exceed each company's recent repatriation average, and funds must have been earned in 2015 or earlier.
The multinationals will invest the foreign profits they bring into the U.S. on job-creating expansions, Boxer said.
'First, it will bring back hundreds of billions of dollars in foreign earnings that are sitting offshore, which can be invested here in America to create jobs,' she said. 'Second, the taxes paid on those earnings will be used to extend the Highway Trust Fund, which supports millions of jobs nationwide.'
State Transportation and Infrastructure Financing Innovation Act The legislation, introduced by Reps. Richard Hanna (R-NY) and Janice Hahn (D-CA), both members of the House Transportation and Infrastructure Committee, would re-establish a system of state-managed infrastructure banks for funding local transportation projects. According to The Ripon Advance:
The Hanna-Hahn legislation brings back the concept of state infrastructure banks, which had operated in many states from 2005-2009 under similar legislation. These banks would work to provide loans, construction debt financing, or lines of credit for highway and other transportation projects in various local areas. The STIFIA program would put the projects and their financing in the hands of the states and local governments, which are much more familiar with the needs and priorities in those areas than the federal government.
Could any of these actually work?