Republicans and Democrats Endorse Concept, but Gloss Over Details, of Funding Infrastructure With User Fees

A federal mileage-based user fee is still years away, and there's very little political support for a federal gas tax hike.

Republicans and Democrats are eager to pass some sort of infrastructure bill. They also might be converging on a means of paying for it.

On Thursday, Axios reported that several prominent Democrats have endorsed the idea of increasing user fees to help pay for any new infrastructure spending. "User fees have to be part of the mix," Sen. Mark Warner (D–Va.) told the publication.

Warner's comments match those of Sen. Tom Carper (D–Del.), chairman of the Senate Environment and Public Works Committee (which handles most infrastructure issues), who said at a Brookings Institution event in April that "things that are worth having are worth paying for and those that use roads, highways, and bridges have an obligation to help pay for them."

User fees—like tolls to pay for highways and public transit fares—have been a mainstay of Republicans' infrastructure proposals. A $536 billion spending plan released by GOP Sens. Pat Toomey (R–Penn.), Roger Wicker (R–Miss.), John Barrasso (R–Wyo.), and Shelley Moore Capito (R–W. Va.) in April calls for collecting user fees on electric vehicles and redirecting already-approved federal spending.

Axios reports that Sen. Kyrsten Sinema (D–Ariz.) has also endorsed the idea of user fees.

Support for the concept of user fee–funded infrastructure is far from universal, however.

President Joe Biden, in keeping with his pledge to not raise taxes on anyone making under $400,000 a year, has rejected the idea of paying for his $2.3 trillion American Jobs Plan with user fees, including a federal gas tax hike. He's instead proposing a corporate tax hike—something Republicans' infrastructure proposal explicitly rejects.

Progressive Democrats also don't like the idea, which they say falls too heavily on the poor and middle class.

"Republicans' insistence that middle-class families and local communities foot the bill for everything from roads to water to broadband, while mega-corporations not pay a penny more in taxes isn't acceptable," said Sen. Ron Wyden (D–Ore.) in an April response to the GOP's infrastructure bill.

Even if there were a consensus of making motorists and transit riders pay for the infrastructure they use, there are still the knock-on questions of what types of user fees might be applied and how much infrastructure they'd actually buy.

The simplest policy to implement under the user fee umbrella would be a federal gas tax hike. It's also the most politically fraught.

Biden has rejected it explicitly, as has Sen. Joe Manchin (D–W. Va.). His fellow West Virginia senator, Capito, has also said no to a gas tax increase. Instead, she's floated charging drivers a mileage-based fee, reports The Wall Street Journal.

The Biden administration has thrown cold water on that idea, however. Transportation Secretary Pete Buttigieg, while agreeing the idea has "a lot of promise," said in a March CNN interview that it wouldn't be part of Biden's plan.

Several states, including Washington, Oregon, and California, are experimenting with mileage fee pilot programs. There are nevertheless a lot of practical problems with trying to implement it at the federal level.

"A mileage-based user fee is not ready for prime time," says Baruch Feigenbaum, a transportation expert at Reason Foundation (the foundation that publishes Reason). We're still years away from a federal mileage fee being feasible, he says, meaning that it can't be used to fund any short-term infrastructure plans

Republicans' other idea to impose a user fee on electric vehicles "is not going to raise that much money because there's just not that many electric vehicles," Feigenbaum says. "Right now, Republicans don't have enough of a pay-for."

The Journal reported yesterday that Biden has asked GOP senators to flesh out more ideas for funding an infrastructure proposal, meaning we could see more details on particular pay-fors soon.

Hanging over this entire debate is whether Congress will try to pass a stand-alone additional infrastructure bill like the one Biden has proposed, or instead incorporate some of those ideas into a reauthorization of existing surface transportation programs (including highway and public transportation spending) that are set to expire at the end of September.

The must-pass nature of a surface transportation bill could be a way to round up bipartisan political support for any proposal. The fact that it can't be passed by reconciliation and would thus need a full 60 votes in the Senate would also mean Biden couldn't use it as a vehicle to pass his most ambitious proposals.

One possibility would be for Biden to get as much of the traditional infrastructure parts of his American Jobs Plan put in a surface transportation bill, and then pursue stand-alone passage of his other proposals like funding nursing homes and affordable housing.

Expect much more political wrangling to come.