• Welch calls for hike in federal gas tax
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     | July 15,2014
     
    Stefan Hard / Staff Photo

    Planned repaving of Route 62 in Berlin and Barre City mght be held up if an impasse on the federal highway trust fund goes unresolved.

    WATERBURY — U.S. Rep. Peter Welch is advocating a 10-cent increase in the gasoline tax to support the soon-to-be-insolvent federal Highway Trust Fund.

    Welch discussed the need for a sustainable funding source Monday morning on Stowe Street beneath a pair of Interstate 89 bridges, whose crumbling concrete piers were a reminder of the state’s — and the nation’s — deteriorating infrastructure.

    “I support having a sustainable revenue source,” said Welch, a Democrat. “If the speaker put this one on the floor, I’d support it.”

    The fund reimburses states for their road and bridge projects, sometimes up to 80 percent. The fund is supported through the federal gasoline tax, which for the past 21 years has stayed at 18.3 cents per gallon. However, tax revenue has not kept up with costs, and, if nothing is done, the fund will dry up by the end of the month.

    Officials say such a move would affect road projects across the country and from one end of Vermont to the other, including many that have yet to break ground:

    — Resurfacing of Route 62 in Barre and Berlin.

    — Resurfacing of the northbound lane of Interstate 89 in Berlin and Montpelier.

    — Construction of a park-and-ride facility at the intersection of routes 5 and 11 in Springfield.

    — Replacement of bridges on Ripley Road and River Street in Rutland City that span the Otter Creek.

    — Replacement of a bridge on Hunt Street in Bennington that spans the Roaring Brook.

    All told, the trust fund’s insolvency would result in a loss of $100 million in construction activity, resulting in a $340 million impact to the economy statewide, according to the Associated General Contractors of Vermont. The industry group estimates a freeze in road construction could result in the loss of 2,850 jobs.

    The Obama administration has warned that by early August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments.

    The depletion of the highway fund would leave state officials unable to plan more than two weeks ahead when they learn their rate of reimbursement, said Vermont Transportation Secretary Brian Searles. He said current and future projects “will be examined to see how much savings they can yield, either in not doing them right away or slowing them or stopping them.”

    “We’ll know what we’re getting every two weeks, which makes it very difficult to plan,” Searles said.

    It would also affect local businesses, said state Rep. Thomas Stevens, D-Waterbury.

    “We are at the whim of the federal government and the state. Any delay, that could change the whole line of projects. We’ve fought hard for improvements on Main Street and on Stowe Street,” Stevens said. “In the end, we have to wait on the feds and the state, and it affects how we make investments here locally and our local businesses. If there are any delays, this means more of a burden for them.”

    Congress has not raised the gas tax since 1993. A 10-cent increase would result in approximately $119 billion in additional revenue a year, based on the assumption the average motorist drives 15,000 miles a year and gets 20 miles to the gallon.

    Welch said an increase in the gas tax is just one possible way to raise more money. Another proposal, opposed by congressional Republicans, would be increased taxation of revenue earned overseas by U.S. corporations.

    “If we repatriated (overseas income) and assigned the revenue in taxes to the highway fund, that would put a significant dent in the deficit,” Welch said.

    Congressional Republicans have proposed lowering the amount of money corporations pay into employee pensions, which would result in a temporary increase in tax revenue, a move opposed by Welch and other Democrats in Washington.

    “Down the road, it means folks who are depending on those pensions may be in some jeopardy,” Welch said. “It’s, in my view, kind of a crackpot way to proceed. We are literally going to try filling a highway pothole by creating a pension pothole.”

    Welch acknowledged an increase in the gas tax would be a burden for Americans, with the national average price for a gallon of gas at $3.61. In Vermont, the average price is $3.73 a gallon.

    “Bottom line is, the user-fee approach is what has been sustainable,” Welch said. “The tax is tough on people. The cost of gasoline is tough, but bad roads are tough. Loss of jobs is tough, and potholes don’t fix themselves.”

    While the fund is projected to be depleted in a matter of weeks, this is hardly a new issue. In March, Lt. Gov. Phil Scott — along with Democratic Lt. Gov. Ralph Northam from Virginia — offered a bipartisan resolution calling on Congress to address the funding shortfall. However, Congress did nothing, setting the stage for an eleventh-hour showdown right before Congress is scheduled to recess in August.

    josh.ogorman @rutlandherald.com

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