Winning Senate confirmation as the next Secretary of Transportation today came fairly easily to Pete Buttigieg, but the former Indiana mayor and Presidential candidate now faces the far more difficult challenge of finding funding for his high priority goal of launching a new infrastructure plan.
Infrastructure is popular in Washington, D.C., uniting a range of industry groups behind that common goal, despite a tumultuous and violent turnover between the Trump and Biden administrations. An array of associations have greeted Buttigieg’s approval by renewing their pleas for federal leaders to craft a plan to renovate crumbling roads, rails, ports, and bridges. However, previous efforts have consistently stalled over the issue of how to fund the work.
Over the past year, President Biden campaigned on the issue, proposing to invest $1.3 trillion over 10 years on projects such as stabilizing the Highway Trust Fund to build roads and bridges, creating electric-vehicle charging networks, a national high-speed rail system, the development of low-carbon aviation and shipping technology, and infrastructure fortifications to withstand the effects of climate change.
The issue of paying for that comprehensive plan quickly emerged during Buttigieg’s January 21 Senate confirmation hearing, when he initially said a gas tax hike was “possible” but later that day said through a spokesman that it was not an option. According to published reports, Congress has not increased the 18.4-cents-per-gallon federal gasoline tax since 1993, making it now worth just 10.2 cents after adjusting for inflation.
During the same hearing, Buttigieg also discussed an alternative fundraising plan based on vehicle miles traveled (VMT), but said that approach could be hampered by privacy and technology concerns. Despite those concerns, states including Kentucky, New Mexico, New York, and Oregon currently levy some form of VMT fee, according to the nonpartisan Congressional Budget Office (CBO).
The CBO has calculated that a VMT tax of 1 cent per mile would have raised about $2.6 billion in 2017 if imposed on all commercial trucks, or about $1.6 billion if imposed only on those with one or more trailers. Either way, the the federal Highway Trust Fund needs the extra income; the agency says that the fund will be exhausted by 2022 without additional revenues or reductions in spending.
Some Republicans today pushed Buttigieg to consider the VMT approach, according to a statement from Sam Graves (R-MO), ranking member of the minority party in the House Committee on Transportation and Infrastructure. “I sincerely believe we can find common ground. For example, Secretary Buttigieg already signaled he agrees that America’s rural infrastructure needs are important and must be addressed,” Graves said in a release. “I also agree with his conclusion that increasing or indexing the federal gas tax is not a long-term solution, especially given the new Administration’s and House Democrats’ goal of virtually eliminating gas-powered vehicles. Clearly, we need to find a fairer and more sustainable method of supporting the Highway Trust Fund, and I look forward to working with Secretary Buttigieg to explore a viable replacement for the federal gas tax, such as a Vehicle Miles Traveled system.”
A third option could be encouraging private sector companies to invest in certain infrastructure features, according to a statement from the National Association of Truck Stop Operators (NATSO). “NATSO congratulates Pete Buttigieg on his confirmation as Secretary of Transportation and looks forward to working with him on a broad spectrum of issues, including the need for long-term, sustainable highway funding and policies that further encourage private-sector investment in alternative fueling infrastructure, such as electric vehicle charging,” NATSO President and CEO Lisa Mullings said in a release.
Yet another approach could be including infrastructure spending in a coronavirus relief bill now being hashed out by federal lawmakers. From their position in the Congressional majority, Democrats argue that the approach could help stimulate the sputtering economy by generating jobs, but it would need unanimous support to prevail in a chamber that is divided evenly between the parties.
Gartner, Inc.