Grassley sees need for transportation funding, but not by raising federal gas tax

DES MOINES - Raising the federal gas tax to meet $160 billion in anticipated transportation needs over the next 10 years is 'off the table” as either a short-term or long-term fix, according to Sen. Chuck Grassley.

He expects the Senate to approve a short-term $11 billion extension of the Highway Trust Fund this week and to take up a six-year extension this fall, Grassley said in a conference call with reporters.

'I don't sense any desire to increase the gas tax,” he said, 'because so many states are raising their gas tax.”

Iowa, for example, raised its tax by a dime-a-gallon earlier this year.

However, that doesn't preclude Congress from finding other sources to raise $92 billion to fund a six-year transportation funding bill, Grassley said. Among ideas being considered are changing the taxes on corporate revenue repatriated from overseas and increasing the import duty on foreign oil.

He thinks an ideal way to fund transportation would be to tax motorists on a per mile basis 'if we knew exactly how to do it and we had a transition period of time.”

Previously, Grassley has cited an experiment conducted by Oregon that captures revenue from vehicles that run on electricity and other fuel sources not covered by the current motor fuel tax. Oregon began its experiment after recognizing that the gas tax is a declining revenue source.

Among the ways to levy the tax would be a flat fee paid by all motorists, or a low-tech approach that would be similar to an odometer. A third approach would be adding a GPS device to vehicles so vehicles only would be charged for the miles they drive in their home state.

Any of the approaches could be accomplished by government partnering with the private sector, according to an Oregon transportation official.

Grassley said a per mile approach would not be a greater burden on rural drivers than the current fuel tax.

'Whether it is per mile or through a gas tax, it's still a user fee,” Grassley said.