A bipartisan pair of senators has filed legislation to create a new tax credit for infrastructure projects.
The measure, which is known as the "Move America Act of 2015,” would expand the availability of tax-exempt bonds and create a new tax credit for state and local governments who are trying to pay for large construction projects.
The legislation, sponsored by Sens. Ron WydenRon WydenFive fights for Trump’s first year Wyden pushing to mandate 'basic cybersecurity' for Senate Consumer groups blast DHS head for seeking travelers' social media passwords MORE (D-Ore.) and John HoevenJohn HoevenHeitkamp raises .6 million for reelection bid: report Combating opioid epidemic, repealing ObamaCare will hurt the cause Senate panel considers how to fund Trump’s T infrastructure package MORE (R-N.D.), comes as lawmakers are struggling to come up with a way to pay for an extension of a transportation funding bill that is scheduled to expire on May 31.
“To get the American economy moving again, Congress needs to pursue every avenue it can to take on the growing infrastructure crisis,” Wyden said in a statement. “Move America will turbocharge investment and give states and localities the flexibility they need to quickly and efficiently break ground on projects. An injection of private capital, in addition to sustainable funding for transportation programs, will help get America’s economic engine running at full speed.”
“Move America bonds and tax credits are an effective way to leverage private-sector dollars to build the infrastructure we need across the country to grow America’s economy and create jobs,” Hoeven added. “We have bipartisan support for this effort and seek to do it in a way that incentivizes private investment, leverages the P3 program and is fully paid for so that it doesn’t increase the deficit.”
The current transportation funding measure is scheduled to expire on May 31. The Department of Transportation has said it has enough money to cover projects for a month or two after that, but then it will have to cut back on payments to state and local governments who are expecting federal help with large infrastructure projects.
Lawmakers have been trying to come up with a way to pay for an extension of the transportation funding measure for months, but there is no easy solution in sight.
The looming transportation funding deadline has dominated talk in Washington for most of the year, but consensus on both the length and financing of the package has been elusive.
Transportation advocates have pushed for a longer measure than the two-year, $109 billion infrastructure bill that was approved in 2012. That measure, the Moving Ahead for Progress in the 21st Century (MAP-21) Act, was extended temporarily last summer and is now set to expire at the end of the month.
The traditional source of federal transportation funding has been the 18.4 cents-per-gallon gas tax, which was first implemented in the 1930s. The tax has not been increased since 1993, and improvements in fuel efficiency have sapped its purchasing power.
The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion at its current rate.
Transportation advocates have suggested that raising the tax or at least indexing it to inflation would be the easiest way to close the infrastructure funding shortfall, but lawmakers have been reluctant to ask drivers to pay more at the pump.
The Department of Transportation has said that its Highway Trust Fund, which takes in revenue from the gas tax, will run out of money in late July or early August unless Congress passes legislation to replenish it this month.