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Monday May 4th, 2015 10:12AM

Senators propose 12-cent gas tax increase

By The Associated Press
WASHINGTON (AP) -- Two senators unveiled a bipartisan plan Wednesday to raise federal gasoline and diesel taxes for the first time in more than two decades, pitching the proposal as a solution to Congress' struggle to pay for highway and transit programs.<br /> <br /> The plan offered by Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., would raise the 18.4-cents-a-gallon federal gas tax and 24.4-cents-a- gallon diesel tax by 12 cents each over the next two years, and then index the taxes to keep pace with inflation.<br /> <br /> The plan also calls for offsetting the tax increases with other tax cuts. It suggests that could be done by permanently extending about 50 federal tax breaks that expired this year, but the senators indicated they would be open to other suggestions for offsets.<br /> <br /> The federal Highway Trust Fund that pays for highway and transit aid is forecast to go broke by late August. Revenue from gas taxes and other transportation user fees that go into the fund haven't kept pace with federal aid promised to states. People are driving less per capita and cars are more fuel efficient, keeping revenues fairly flat. But nation's infrastructure is aging, creating greater demand for new and rebuilt roads and bridges. At the same time, the cost of construction has increased.
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