Jan. 15 (Bloomberg) -- U.S. federal fuel taxes should be boosted as much as 40 cents a gallon to finance highway, bridge and transit work, a panel created by Congress recommended.

The increase, phased in over five years, would help pay for at least $225 billion a year in transportation construction and repairs by government and business, according to the panel. The federal gasoline tax is now 18.4 cents a gallon.

The report comes five months after an interstate highway bridge in Minneapolis collapsed and brought attention to transportation spending and repair needs. The Aug. 1 bridge collapse, the nation's worst in 25 years, killed 13 people.

``Raising gas taxes won't improve traffic congestion,'' Transportation Secretary Mary Peters, who chaired the panel, said in a statement dissenting from the recommendation. ``It will only perpetuate our ineffective reliance on fossil-based fuels to fund infrastructure.''

Peters was joined in her dissent by two others on the 12- member National Surface Transportation Policy and Revenue Study Commission.

``We have to increase the investment,'' commission Vice Chairman Jack Schenendorf said today in Washington, speaking for the commission's majority. ``We can no longer allow for revenues to be stagnant.''

Congestion Pricing

The commission called for allowing metropolitan areas with at least 1 million people to use so-called congestion pricing, which would charge drivers a fee to enter during peak traffic hours. New York City is considering such a method in Manhattan to curb traffic and reduce pollution tied to global warming.

The panel also proposed shifting away from a fuel consumption tax by 2025 and creating an alternate source of funding, such as taxing the number of miles driven.

The federal gasoline tax has been unchanged since 1993, when it was raised 4.3 cents a gallon. The increase proposed by the commission would not take place until after President George W. Bush, who has opposed fuel tax increases, leaves office.

``The good news is the Bush administration will be gone,'' said Representative Peter DeFazio, an Oregon Democrat who chairs the House highways and transit subcommittee. ``I expect the next administration will recognize there is a need.''

When Congress renews a highway spending law in 2009, lawmakers may prefer a more ``incremental'' gasoline-tax increase than the commission proposed, DeFazio said in an interview.

The increase would ``cost about 41 to 66 cents a day for the average American motorist,'' Schenendorf said. ``It's a small cost to pay for the benefits of these programs in terms of reduced congestion, reduced fatalities and for the economic growth of our country.''

`A One-Word Mention'

Schenendorf, a former congressional staff member, said he hopes the commission's report raises the profile of transportation in the presidential campaign.

``When I was working on the Hill, our goal was to get a one-word mention of transportation in the state of the union, and we were never successful,'' Schenendorf said. ``Whoever wins in November is going to have to address this issue.''

The call for higher fuel taxes comes as the price of a gallon of gasoline has risen 38 percent in the past 12 months. The average price of gasoline at the pump was $3.06 a gallon yesterday, according to AAA, a group representing motorists. That was 17 cents cheaper than the record high of $3.23 on May 23.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

Last Updated: January 15, 2008 18:26 EST