Congress still looking for ways to pay for highway funding
With the Highway Trust Fund set to run out of money May 31, 2015 some members of Congress are still seeking different ways to extend the Fund. Talked about last week: taxing overseas corporate profits, raising the gas tax or using the revenue from the estate tax to pay for highways.
With Congress averse to increasing any taxes, and the House having already passed a repeal of the estate tax (see story above), the only serious idea at this point is taxing overseas corporate profits, a practice known as repatriation. Highway funding is such a pressing issue that two senators from opposite ends of the political spectrum, Barbara Boxer (D-Calif.) and Rand Paul (R-Ky.), came together to introduce a bill, the Invest in Transportation Act of 2015.
The bill would allow companies to voluntarily return their foreign earnings to the U.S. at a tax rate of 6.5 percent, for funds earned in 2015 or earlier. All tax revenues from the repatriation program would be transferred into the Highway Trust Fund.
If Congress does not provide additional revenue to the Highway Trust Fund before [May 31], states will face cash-flow problems during the extremely busy summer construction season, said a statement from Senators Boxer and Paul. Already, Arkansas, Georgia, Tennessee and Wyoming have delayed construction projects due to the uncertainty in federal transportation funding.
In the House, a bipartisan group of members has introduced a bill to index the gas tax to inflation in January 2016 and raise it again in three years unless Congress has found another sustainable source of highway funding. The bill, the Bridge to Sustainable Infrastructure Act, is intended as a short-term solution.
The bill would create a bipartisan, bicameral Transportation Commission by September 1, 2015, and Congress would be required to enact the commissionês recommendations or another three-year funding measure by December 31, 2016. Otherwise the gas tax would automatically increase.
Rep. Peter DeFazio (D-Ore.), the top ranking Democrat on the House Transportation Committee, suggested that the money collected from the estate tax could be used to fund the Highway Trust Fund. Repealing the estate tax would cost the U.S. about $270 billion over ten years he said.Download Bulletin PDF