Next congressional crisis: The federal gas tax?

WASHINGTON — Talk about a bumpy road ahead. When Congress gets back to Washington next month, lawmakers face a possible legislative pile-up over the federal gas tax, an important source of funds to Connecticut and every other state with transportation infrastructure needs.

That 18.4-cent levy on every gallon expires on Sept. 30. And it could quickly become a focal point for a fresh fight over taxes and spending, as lawmakers rev up the debate over debt reduction this fall.

At the end of last year, President Barack Obama’s bipartisan fiscal commission recommended a gradual 15-cent hike in the federal gas tax starting in 2013. Other debt-reduction groups have similarly looked at ways to shore up funding for the federal Highway Trust Fund, which currently does not take in enough revenue to cover the nation’s transportation spending levels.

But raising the gas tax is a non-starter in this Congress, where House Republicans, filled with Tea Party fervor, have opposed any tax increases. And indeed, some conservative groups have even signaled that they would like to see the gas nixed all together, and they see the looming deadline as an opportunity to move in that direction.

“In general, we support the concept of eliminating the federal gas tax and letting the states fund transportation,” said Barney Keller, a spokesman for the Club for Growth, an influential conservative group.

Keller said the Club has not taken any position on legislation to extend the current gas tax yet, because they first want to see what kind of long-term transportation bill Congress comes up with. That legislation will map out federal highway spending for the next several years, to be paid for by any extension of the gas tax.

Meanwhile transportation advocates are scrambling to shore up support for the gas tax and nervously eyeing the crunched congressional calendar.

“There are 11 legislative days in September before the current extension expires,” noted Tony Dorsey, a spokesman for American Association of State Highway and Transportation Officials (AASHTO). “That gives you a sense of the urgency of this. They’ve got to move.”

Donald Shubert, a spokesman for Keep CT Moving, a transportation advocacy coalition, said he’s asked Gov. Dannel Malloy’s administration to consider pushing for a “safety valve” provision at the state level that would increase Connecticut’s gas tax to compensate in case the federal gas tax lapses.

He noted that Tennessee has a statute on its books that automatically adjusts the state tax upwards if the federal tax declines or ends, so the state can maintain its transportation revenue stream.

“I’m hoping our governor’s office will consider something like this,” Shubert said, in case Congress deadlocks over the tax.

But Malloy’s proposal in February to increase the 25-cent gas tax by 3 cents to shore up the state’s own special transportation fund eventually was abandoned in the face of hostility by the state legislature.

Emil Frankel, a transportation commissioner for then-Gov. Lowell P. Weicker Jr. and now director of transportation policy at the Bipartisan Policy Center in Washington, said there’s probably a clear majority in Congress that favors renewing the gas tax.

“But that’s not to say that majority will be able to work its will,” he said. “There will be some kind of a battle over it. How serious is it, I don’t know…  But one could imagine that there will be difficulties and obstruction and hurdles to the extension.”

He pointed to the recent shut-down of the Federal Aviation Administration, after lawmakers failed to agree on a short-term extension of that agency’s key programs. For about two weeks, 4,000 federal workers were furloughed and 75,000 construction workers were idled, and the FAA was unable to collect more than $28 million a day in airline taxes.

In addition to the gas tax, lawmakers also have to reauthorize the underlying federal highway and transit programs; the law to keep those programs operating also expires on Sept. 30. And the disputes over a long-term highway bill are at least as complex and contentious as the ones that jammed up the FAA reauthorization.

“In this context, with the Tea Party, the unseemly battle over the debt ceiling, [and] the FAA shutdown… it strikes me as fraught with danger that both [transportation] program authority and the funding sources are ending on the same day,” Frankel said.

He and others said it would be devastating if the gas tax was allows to expire, even for a short window. The federal government would not be able to reimburse states for any construction work currently underway, let alone make future commitments for key projects.

“You would have such a huge problem,” Janet Oakley, AASHTO’s director of policy and government relations. “The construction industry is already on its knees as it is. And this would just send them over the edge, because few states would have the cash flow to pay the contractors without the reimbursement.”

Oakley said that a month or so ago, she and her colleagues were pretty nervous about the prospect of a stalemate over the gas tax, particularly in the wake of the FAA impasse. But they’ve been working furiously in recent weeks to talk to lawmakers about the importance of renewing the fuel tax.

In addition to the 18.4-cent tax on gasoline, there’s a 24.4 cent levy on diesel fuel and several other revenue provisions, such as a tax on heavy truck tires, which are all vital to filling the coffers of the Highway Trust Fund. That pot of money is then divvied up for highway and transportation projects across the country.

Oakley noted that in past years, the gas tax has been reauthorized repeatedly without much controversy. But earlier this month, a leading anti-tax conservative, Grover Norquist, hinted that he would like to use the Sept. 30 expiration as a way to spur debate over the federal gas tax.

His group, Americans for Tax Reform, has long argued for the repeal of the gas tax.  Like the Club for Growth, Norquist has argued that the tab for highway and transit projects should fall to the states.

“ATR would love to help begin such a dialogue,” Norquist told Politico earlier this month

To the relief of Oakley and others, Norquist has since said he would not consider a vote in favor of extending the gas tax a violation of his group’s no-tax-increase pledge. Many Republicans have signed that promise, and Norquist has exercised significant pressure to hold them to it, so his statement makes an extension of the gas tax somewhat easier.

Still, Oakley said that in two decades of working on this issue, she’s never seen such uncertainty surrounding the gas tax. “We’re in uncharted territory,” she said.

That fact that the gas tax and the transportation authorization law are expiring at the same time makes the political calculations a little more charged, she added.

“All of this has to come together,” she said.  “It really raises the stakes.”

All the same, she said she’s optimistic that it will get done.

“I think there will be a flurry of activity the first week when they return,” she said. “That’s not to say there won’t be some drama attached to it, as we saw from the FAA bill. But we think that cooler heads will prevail.”