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Breaux urges federal assistance for state projects
by Joan McKinney, THE ADVOCATE
Dec. 7, 1996

WASHINGTON - As he embarks on a study of overhauling the federal tax code, U.S. Senate Finance Committee member John Breaux, D-La., already has one idea for a small-scale change: Divert some of the federal gasoline tax to the roads and public building needs of state and local governments.

Highways, bridges, levees, water systems, schools and other public structures are falling apart in Louisiana and every other state, Breaux said this week.

The infrastructure crisis warrants a federal response, and a partial gasoline tax diversion is a relatively cheap way to do that, he said.

Breaux advocated rebating the fairly new gasoline tax increase - 4.3 cents per gallon - to states and localities.  That would send about $ 5 billion a year to state and local governments, he said.

That's not enough money, by itself, to meet the nation's repair needs, but it could underwrite a lot of state and local bond initiatives for infrastructure projects, the senator said.

In a $ 1.5 trillion federal budget, the $ 5 billion diversion to the states is not expensive "for what you get out of it" - meaning infrastructure repair, immediate construction jobs and probable spin-off investments, Breaux said.

Some private economists previously have recommended dedicating all, or part, of the gasoline tax increase to infrastructure needs, but both President Clinton and Republican congressional leaders have ignored that proposal.

Under current law, the 4.3 cents-per-gallon tax increase is dedicated to deficit reduction, and the administration and congressional budget-writers have wanted to retain that revenue flow in order to help balance the federal budget by 2002.

Breaux will co-host a seminar on federal tax policy in Baton Rouge next week.  Speakers will advocate or explain a variety of tax reform alternatives, and a panel representing Louisiana businesses and the audience will then ask questions.

The seminar is free.  Pre-registration is requested but not required.  The contacts are Bob Mann in Breaux's Baton Rouge office at 382-2050 or Virginia Martin at the Public Forum Institute in Washington at (202) 467-2772.

The seminar is set for 9 a.m. to 2 p.m. Dec. 13 in the Premier Ballroom at the Radisson Hotel and Conference Center.

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