WASHINGTON—The Obama administration plans to send four-year, $302 million transportation reauthorization legislation to Congress in April, and stakeholders are weighing in on what they want to see—and don't want to see—in that bill.
The Tire Industry Association (TIA) is unhappy at the prospect of losing the “Last In, First Out” (LIFO) accounting method for tax and expensing purposes—the repeal of which both the White House and Republican members of Congress are proposing—as well as about possible tax increases for gasoline and tread rubber.
The proposal could also include new taxes such as a weight-distance tax for trucks and a tax on individual drivers for miles traveled.
Meanwhile, groups such as the American Trucking Associations (ATA) fear the president's proposals—which include large boosts for rail freight and mass transit—come at the expense of the nation's road and bridge users.
The pending Obama transportation package is only one of several transportation bills expected to be introduced this year.
House Ways and Means Committee Chairman Dave Camp, R-Mich., has released a tax reform plan that includes a $126.5 billion provision to fund highway and infrastructure investment. Also, Sen. Barbara Boxer, D-Calif., and Rep. Bill Shuster, R-Pa., are expected to offer transportation bills later this year.
Transportation Secretary Anthony Foxx's March 12 testimony before a House Appropriations subcommittee made clear the administration's desire to avoid quick fixes for the Highway Trust Fund this year.
“Year after year, we've shored up the Highway Trust Fund with interim measures,” Mr. Foxx said, adding that state transportation agencies have deliberately canceled or postponed projects rather than being forced to end them because of insufficient funds.
In his 2015 budget, President Barack Obama said he would partially fund transportation projects through a one-time, $150 billion payment with money obtained through pro-growth business tax reform.
Mr. Foxx, however, told the subcommittee the White House was willing to work with Congress on whatever new taxes or funding mechanisms it deemed necessary.
This makes it all the more crucial that TIA make its presence felt at negotiations for the 2014 transportation bill, according to TIA Executive Vice President Roy Littlefield.
In 1982, when the Senate Finance Committee was deep in negotiations for the Surface Transportation Act, the former American Retreaders' Association (ARA)—one of the forerunner groups to TIA—discovered just how important proximity to policy makers really was, Mr. Littlefield told Tire Business.
“All of the industry lobbyists had gone home for the weekend,” said Mr. Littlefield, who was working for the ARA at the time. “Sen. Bob Dole, who was chairing the meeting, called for a brief recess. I can remember him coming into the hallway, and when he saw me, he said, 'Don't the retreaders have an opinion on what the tire tax should be?'”
ARA Executive Vice President Ed Wagner went into a private room with Sen. Dole, and together they negotiated a tire tax structure that lasted more than 20 years, Mr. Littlefield recalled.
President Obama's proposal is still somewhat vague, according to Mr. Littlefield. Congress is just as ardent for a long-term transportation funding bill as the Obama administration, he said, but TIA wants to avoid a massive federal gas tax increase modeled on the state gas tax increases enacted in Pennsylvania and Maryland.
“Virginia got a big boost in highway funding while lowering its gas tax,” he said.
There are many transportation funding proposals floating around Capitol Hill, but very few of them have yet been introduced as legislation, Mr. Littlefield said. One bill introduced last year that TIA likes is H.R. 2084, the Partnership to Build America Act of 2013, which has 56 co-sponsors in the House.
H.R. 2084 would establish an “American Infrastructure Fund” as a wholly owned government corporation to provide bond guarantees and make loans to state and local governments and non-profit infrastructure providers for transportation and other infrastructure projects. The bill has been referred to the House Ways and Means Subcommittee on Water Resources and Environment, but has not yet seen action.
In contrast to TIA, the Rubber Manufacturers Association (RMA) has said little publicly about transportation legislation—largely because RMA members have not directed the association to take a position on the issue.
“If changes in transportation infrastructure revenue sources are offered which may affect RMA members, we will examine those proposals with our members,” said RMA Senior Vice President Dan Zielinski. The path for almost any transportation package will be difficult this year, he added.
“The election year plus the highly charged partisan atmosphere on Capitol Hill is making (it) difficult to achieve consensus on many legislative issues,” he said.
The ATA condemned the Obama budget for what it saw as shortchanging the needs of truck fleets in favor of railroads.
“Today's proposed budget misses the mark when it comes to the transportation needs of the U.S. economy,” said ATA President Bill Graves March 4, the day President Obama announced his budget.
“It provides no real funding for solutions for the long-term health of our infrastructure and proposes massive new subsidies for a mode that moves a small proportion of America's freight and passengers.”
The trucking industry moved moved 68.5 percent of the nation's freight in 2013, compared with 14.7 percent for railroads, Mr. Graves said.
Meanwhile, with the looming threat of the Highway Trust Fund's depletion as early as August of this year, a new group calling itself the “Transportation Construction Coalition” has started what it calls its “Hardhats for Highways” campaign—devoted to educating legislators about the crucial connection between highway funding and local jobs.
“Hardhats for Highways,” the coalition said, is aimed at encouraging transportation construction firms to contact their congressional representatives to inform them on how many jobs across the U.S. depend on federal transportation funding.
“The livelihoods of hundreds of thousands of workers and their families depend upon Congress finding a long-term and sustainable solution to financing the nation's surface transportation network,” said Pete Ruane, co-chair of the coalition and president of the American Road & Transportation Builders Association.
To reach this reporter: [email protected] crain.com.