A proposal by Connecticut U.S. Sen. Chris Murphy to increase the federal gas tax to pay for infrastructure repairs and investments was rebuffed by the Obama administration last week, after the president’s handlers said the White House was cool to the idea.
Increasing any tax — let alone the gas levy, which is felt more by middle class voters than anyone else — during a mid-year election probably isn’t smart politics, so it’s understandable Obama wouldn’t back the proposal at this time.
However, a bump in the 18.4 cents federal gas tax, which hasn’t been increased in 21 years, may not be a bad thing for Connecticut.
With about $5.4 billion in unfunded highway and bridge projects, Connecticut is desperate for federal funding to get major infrastructure projects off the ground, including replacement of the I-84 Viaduct, which carries an estimated $3 billion pricetag. That project — seen as a linchpin to Hartford’s continued revitalization efforts — has little to no chance of getting off the ground without major federal support.
Unfortunately, Uncle Sam’s Highway Trust Fund is expected to be depleted by the end of July, which would leave states with significantly less funding to maintain their interstates. The threat of federal support drying up has been a recurring theme in recent years, making it difficult for states to take on long-term infrastructure projects.
Connecticut, too, has a credibility issue when it comes to funding public works initiatives.
For years, state lawmakers have raided Connecticut’s Special Transportation Fund, shifting tens of millions dollars in annual wholesale fuel tax revenues earmarked for infrastructure projects, to the general fund to help fill budget deficits.
Since 2005, the state has spent half of the $2.6 billion raised by wholesale fuel taxes on non-transportation programs, according to one recent estimate by the Connecticut Mirror.
The budget gimmickry is bad fiscal policy that has had a devastating impact on Connecticut’s ability to make key, long-term infrastructure investments, which are crucial to maintaining the state’s economic competitiveness.
Just last week the U.S. Federal Highway Administration disclosed that nearly 10 percent of Connecticut’s 4,218 bridges are structurally deficient, a number that is climbing every year. FHA rated 413 bridges as structurally deficient in 2013 and another 1,059 as functionally obsolete.
Connecticut taxpayers and businesses are already burdened with one of the highest state fuel taxes in the country (49 cents per gallon); continuing to raise local gas taxes only will exacerbate the state’s economic competitiveness woes.
That makes raising the federal gas tax a more palatable solution since the pain will be shared equally by all 50 states. Murphy’s call to increase the federal gas tax by 12 cents a gallon to 30.4 cents over the next two years did have some bipartisan support.
The business community is typically opposed to any levy hikes, but in recent years they’ve softened to the idea of raising more revenue for infrastructure repairs.
Last October, for example, the U.S. Chamber of Commerce, one of the largest pro-business lobbies in the country, came out in favor of raising the federal gas tax to help fix roads and bridges. Meantime, a December Connecticut Business & Industry Association survey found that transportation is a top-three state spending priority companies are willing to help pay for, behind education and economic development.
The caveat, of course, is that if employers ante up more money for transportation, those funds must be used for that purpose.
