Published on May 2, 2014

Transportation bill could include more toll roads (Update)

By Miles Moore, Senior Washington Reporter

WASHINGTON (May 2, 2014) — The four-year, $302 billion transportation funding bill the Obama administration sent Congress April 29 includes provisions that would remove the prohibition against placing tolls on interstate highways.

The bill also would mandate an enormous increase in the maximum civil penalty for the safety recall of a tire, auto or auto part to $300 million from the current $35 million.

While not mandating tolls on interstates, the bill would leave up to the individual states whether to place toll booths on federal highways within their borders. Only a few of the older roads in the interstate network — including the Ohio, Pennsylvania and New Jersey turnpikes — charge tolls on motorists.

While some stakeholders supported the proliferation of toll roads to fund highway projects, others expressed disappointment in the administration’s funding suggestions in general — not just toll roads but also the one-time $150 billion payment from business tax reforms to fund highway and infrastructure repairs.

“We have real questions about the viability of the administration’s plan to use one-time proceeds from an unspecified and unlikely-to-pass corporate tax reform idea, along with inefficient highway tolling or private capital financing,” said Bill Graves, president and CEO of the American Trucking Associations (ATA).

The Tire Industry Association (TIA) is completely opposed to placing tolls on interstate highways, according to TIA Executive Vice President Roy Littlefield. The proliferation of toll roads, Mr. Littlefield said, has already hastened the deterioration of America’s highways.

“This is a huge problem for truckers,” he said. “When you lease a road for 99 years, you have to make a return on your investment. This means that maintenance is nonexistent, and the roads are in terrible shape.”

(U.S. Dept. of Transportation)

Truck fleets already pay a great deal in taxes and tolls, and more tolls will only add to their burden, according to Mr. Littlefield, who added: “I don’t know how truckers make a profit even now.”

Regarding the increase in civil penalties for recalls, the National Highway Traffic Safety Administration (NHTSA) said it was intended as a deterrent against manufacturers who deliberately fail to report product defects.

The proposed increase comes on the heels of news that General Motors Co. ignored an ignition switch problem in some 2.6 million vehicles for as long as 10 years before finally ordering a recall earlier this year.

Passing a transportation funding bill is a top priority for the Obama administration, as well as for stakeholders in transportation. The non-profit group Transportation for America issued a report April 29, detailing the loss to states that would occur if the Highway Trust Fund (HTF)—which is funded solely by the 18.4-cents-per-gallon federal motor fuel tax—is allowed to run out of money.

“While nearly each state raises their own funds through some sort of taxing mechanism and local governments contribute their own funds, federal funds account for the lion’s share of almost any major project in this country,” Transportation for America said.

Federal dollars account for more than half of highway funding in 35 states and much more than that in many of those states, reaching a high of above 90 percent in Alaska and Rhode Island, the group said.

“Regions like Miami, Seattle, Atlanta, Denver, Dallas, Philadelphia, Minneapolis-St. Paul—to name just a few—could be out $100 million or more,” it said.

The HTF was established by the Highway Revenue Act of 1956 as a mechanism to finance an accelerated highway program, including the Interstate Highway System, according to the U.S. Department of Transportation (DOT) website. The taxes dedicated to the HTF are extended periodically by Congress. Each year, highway users pay billions of dollars in highway excise taxes, which end up in the Federal Highway Trust Fund.

“While motorists pay these taxes as they purchase the various taxed items,” the DOT said, “the U.S. Department of Treasury actually collects most of these taxes from large corporations located in a handful of States, and deposits the receipts into the Highway Trust Fund.”

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To reach this reporter: mmoore@crain.com.

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