Utah Sen. Mike Lee on Thursday urged Pete Buttigieg, President Joe Biden’s nominee to become his new transportation secretary, not to raise federal gasoline taxes to bolster a federal Highway Trust Fund that is teetering on insolvency.
Buttigieg said he would consider alternatives — but will consider a tax hike, too.
That exchange came during the confirmation hearing for the former mayor of South Bend, Ind. — known as “Mayor Pete” — when he ran as a Democratic presidential candidate last year.
The federal portion of the gasoline tax, 18.4 cents per gallon, has not been raised since 1993. It is the major source of funding for the Highway Trust Fund, which helps pay for federal highways and local mass transit projects. It is projected to have shortfalls later this year.
The Congressional Budget Office projects that by 2030, outlays from the fund will exceed reserves by a cumulative $134 billion for the highway account and by $54 billion for the mass transit account.
Lee asked Buttigieg if he will raise gasoline taxes to make the fund solvent.
“Well, it’s possible. Certainly, many states have taken that step” to cover their own increasing transportation costs, Buttigieg said. That includes Utah, which imposed a small gasoline tax increase on Jan. 1 that is calculated and triggered each year automatically by state law based on the average price charged by refineries.
But Buttigieg added, “It’s not the only approach,” and he said that he is willing to look at alternatives.
“I think there’s a recognition that we don’t have adequate national resources going into roads and highways and that we need to look at any responsible, viable revenue mechanism we can all agree on to do something about that,” he said.
Lee then pushed against a gasoline tax hike, saying that tax is regressive — meaning it hurts the poor more than the rich because it takes a bigger percentage of their paychecks.
“It’s my view that we ought to be looking at a lot of other options before — or instead of — getting to that one,” Lee said.
He then asked Buttigieg what he thinks about some specific possible alternatives.
For example, Lee said officials in some states tell him that 20% or 30% or more of their highway projects go toward complying with federal regulations. So, he asked Buttigieg if he would look at reducing the regulatory burden to cut costs to keep the trust fund solvent.
“Certainly, we want to take a look at this,” he responded. “You know as mayor I saw how rules and regulations can add to the time or expense of a project. Of course, those rules are there for a reason. But if we can meet that same reason with less of a burden, we should look at how to do it.”
Lee asked if Buttigieg would also consider other cost-saving measures besides a gasoline tax hike.
“Any government enterprise needs to run as efficiently as possible. These are taxpayer dollars, and we’ve got to make sure that we are streamlined and delivering as much as possible toward the actual intent,” Buttigieg said.
“It was a focus of mine when I was mayor to make sure that we didn’t have any duplicative or outdated things that were adding to the cost of delivery,” he said. “That’s certainly something I want to look into here as well.”