Tax hikes and electric car fees on the table as Biden maps out infrastructure plan

President Joe Biden’s sweeping infrastructure plan could include a number of new taxes or fees — including one on electric car owners — to pay for transportation projects, according to a California Democrat who attended a meeting at the White House this week.

Biden met with Democratic and Republican members of Congress Thursday to discuss priorities of the infrastructure bill. He floated a $2 trillion infrastructure bill while campaigning, but his administration has declined to specify how much the bill will likely cost.

It’s sure to be significant. The White House is not disclosing a cost because the administration wants to identify projects that need help and not start by limiting cost, according to Rep. John Garamendi, D-Walnut Grove, who was at the Thursday meeting.

“No price tag right now, because we’re going at this from the bottom up,” Garamendi said. “We’ll say, ‘what’s the cost of broadband, what’s the cost of repairing bridges?’ and go from there.”

Biden made it clear during the meeting that this infrastructure bill needs to be bipartisan, Garamendi said. How to pay for an expensive bill is sure to be a sticking point, especially for Republicans and moderate Democrats.

The ideas discussed at the meeting included raising the excise tax on fuel, which is currently about 18 cents per gallon of gasoline and 24 cents per gallon of diesel.

“The excise tax on fuel hasn’t been raised in 20 years,” Garamendi said.

Other ideas included how to get electric vehicle owners to pay for infrastructure, since they are not subject to fuel taxes. The group talked about installing a “user fee” for electric vehicles on highways.

California accounted for almost half of the nation’s 543,610 all-electric vehicle registrations as of 2018. That year, 256,800 all-electric vehicles were registered in the state.

Another idea mentioned, according to Garamendi, was a carbon tax. That tax would apply to both businesses and consumers, putting a tax on carbon dioxide and other greenhouse gas emissions.

Garamendi said they’re looking at ways to offset the hit to households, including with potential refunds.

That could still come with significant costs to consumers. “A tax of $40 per ton would add about 36 cents to the price of a gallon of gasoline, for example, or about 2 cents to the average price of a kilowatt-hour of electricity,” says an analysis of the carbon tax by the Tax Policy Center, a nonpartisan government watchdog.

But it has the potential to raise significant money — the Joint Committee on Taxation and the Congressional Budget Office estimated that a carbon tax starting at $25 per ton in 2017 and rising at a rate adjusted to inflation would raise $1 trillion over its first decade.

The White House declined to comment about the discussion in the Oval Office. Press Secretary Jen Psaki offered no specifics on the discussions in a press briefing Friday.

“I don’t have any more details. We don’t even have a package that is being proposed at this point, and when we get to that point I’m sure we’ll have this discussion,” Psaki said. “Obviously the President has talked in the past about different revenue raisers, whether it’s rolling back certain tax cuts, but we’re just not at that point in the internal policy discussions right now.”

Garamendi, a senior member of the House Transportation and Infrastructure Committee, said there are a few California projects he believe should be a priority in the bill.

“Money for broadband services in underserved communities is a new priority, certainly in the rural area,” Garamendi said. “You get outside of Davis, go to Winters, and the broadband disappears between the two communities. Broadband doesn’t exist for some farmers in my district.”

He also thinks money is needed for the Yolo Causeway, the Sites Reservoir, the Stockton Ship Channel, the Port of Oakland and more.

Both Republicans and Democrats have prioritized an infrastructure bill for years. Both former Presidents Donald Trump and Barack Obama tried to assemble sweeping infrastructure bills and failed for different reasons.

The American Society of Civil Engineers issued a dire warning in a January report about the need for sweeping infrastructure updates.

“Our most recent report found that that infrastructure inadequacies will stifle U.S. economic growth, cost each American household $3,300 a year, cause the loss of $10 trillion in GDP and lead to a decline of more than $23 trillion in business productivity cumulatively over the next two decades if the U.S. does not close a growing gap in the investments needed for bridges, roads, airports, power grid, water supplies and more,” the organization wrote to the Biden administration in January.

McClatchyDC White House reporter Francesca Chambers contributed to this report.