Rendell: Gas tax increase 'inescapable'

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The traditional source of funding for transportation projects is the 18.4 cents per gallon federal gas tax, which brings in approximately $35 billion per year.

Congress is in the first year of a two-year, $105 billion transportation bill that was passed by lawmakers last year.

The gap between the measure's funding levels and the gas tax collections was filled with a package of fee increases and closing tax loopholes.

Rendell and other transportation advocates pleaded with lawmakers on Wednesday to find new funding sources to avoid the necessity of cobbling together revenue for road and transit projects.

"We can't be an exceptional country without a world class infrastructure, and let the record show, we don't have one anymore," Rendell told the committee. 
"I don't want to hear anybody talk about American exceptionalism if they're not ready to fund infrastructure."

Transportation advocates have argued that the $54 billion that is being spent in each of the next two years by the 2012 highway bill barely covers maintaining the existing road and transit system.

Rendell told lawmakers Thursday they would have to consider alternative funding sources to properly maintain the national transportation system, even if they approved an increase in the gas tax.

"Unlock and free the states to toll their roads," Rendell said, referencing the fact that current law only allows tolling on exist highways for new lanes that are constructed.

"I know there's a theory that you paid for it already, but you pay for a car when you buy it, but you also pay to maintain it year after year after year," Rendell said.

Rendell's call for increased transportation spending found support from U.S. Chamber of Commerce President Tom Donahue, though Donohue said he did not agree with the former governor's specific proposals 100 percent.

"What does the Chamber think?" Donohue asked rhetorically. "We think we're going to have to raise more money. I i thought governor raised a lot of interesting [ideas]. Do we support all of them? No, but I'm willing to discuss them."

Donohue called for lawmakers to approve more public-private partnerships to fund transportation projects, arguing that so-called P3s "ease strain on federal and state budget, and free up public money for projects that can attract investment."

But like Rendell, Donohue also told lawmakers they will have to do more on their end to adequate fund transportation.

"There is no path to a 21st economy without increasing both public and private investment," Donahue told the committee. "Neglect is not an option. Sitting on your seat is not an option anymore. Our infrastructure system is a national treasure."

The stated purpose of the hearing Wednesday was to debate the "federal role" in transportation funding. During his opening remarks, Shuster invoked George Washington to argue that transportation spending should at least be protect from budget cuts that are dominating the discussion in a sequester-focused Congress.

But Donohue's apparent openness to Rendell's call for an increased gas tax quickly drew the ire of Shuster's predecessor on the Transportation Committee, Rep. John Mica (R-Fla).

Mica said he was "extremely disappointed to hear the national head of the U.S. Chamber, my friend, Tom Donohue, come before the House Transportation Committee and offer again his centerpiece for solving transportation problems as a gas tax. 

"Unfortunately, the supposed key private sector business spokesperson has backslided again to a myopic tax and spend agenda," Mica said in a statement released while the Transportation Committee was still meeting.

“Rather than focus on innovation and investment from the private sector, cutting wasteful programs and red tape, he championed tax increases," Mica continued. "Rather than cite vision and innovation for cost effective transportation solutions, he advocates tax increases. Unfortunately, Mr. Donohue has lost touch with the business people he represents, and it would be my hope that he can seek other opportunities for employment as soon as possible.”

Democrats on the panel appeared more receptive to the call for increasing transportation spending.

"We're going to get as much grief for a nickel as we are going to get for a dime," Rep. Mike Capuano (D-Mass). said, arguing that lawmakers should appropriate as money for road and transit projects as is required.