WASHINGTON (March 31, 2015) — The $10.8 billion stopgap transportation funding bill signed by President Barack Obama last August will lapse in May, leaving the Highway Trust Fund — which provides money for all federal highway construction projects — totally depleted.
Yet this fact has not led to any agreement among federal lawmakers on a multi-year transportation reauthorization package. Various proposals — some old, some new — are floating around Congress, but most if not all are getting only partisan support.
“It's really hard to say,” said Roy Littlefield IV, government affairs manager for the Tire Industry Association, (TIA) regarding the state of transportation funding negotiations. Chairmen of major House and Senate committees can't even agree on the terms of the debate, according to Mr. Littlefield.
Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, is adamant that the current federal motor fuel tax of 18.4 cents per gallon not be touched, according to Mr. Littlefield.But Sen. James Inhofe, R-Okla., chairman of the Senate Environment Committee, is all for a gas tax increase.
“Sen. Inhofe insists that it's a user fee, not a tax,” Mr. Littlefield told Tire Business. Meanwhile, important stakeholders in the transportation and infrastructure debate are making new proposals for a multi-year transportation funding package, Mr. Littlefield said.
The most recent group to do so is the American Road & Transportation Builders Association (ARTBA), which on March 12 released its outline for a six-year, $401 billion transportation bill. The ARTBA's “Getting Beyond Gridlock” proposal combines a 15-cent increase in the gas tax with a 100-percent offsetting federal tax rebate for middle- and lower-income families.
Under the ARTBA plan, a single tax filer with an annual adjusted gross income of $100,000 or less would receive a $90 tax rebate, which the ARTBA said would be the average cost to a single person of a 15-cent-per-gallon gas tax increase. Joint filers with adjusted gross incomes of $200,000 or less would receive a $180 rebate, according to the ARTBA.
For its part, TIA supports the Partnership to Rebuild America Act, first introduced in the last session of Congress by Rep. John Delaney, D-Md. TIA made Rep. Delaney's proposal a main topic at its TIA Federal Lobby Day Feb. 5, where Rep. Delaney was one of the featured speakers.
The Partnership to Rebuild America Act would establish a $50 billion American Infrastructure Fund through the Treasury Department, with leveraged financing of up to $750 billion for state and local governments to fund infrastructure projects. The bill also would provide tax incentives for multinational corporations to move an estimated $2 trillion in offshore profits back to the U.S.
in return for using some of the collected taxes to repair the nation's infrastructure. Rep. Delaney estimates that his proposal would provide between $150 billion and $200 billion for the Highway Trust Fund. His ideas have found favor in the Obama administration, which added similar tax incentives for multinational corporations to its six-year, $478 billion reauthorization proposal.
However, the 14-percent transition tax in the White House proposal is considerably higher than the 8.75-percent tax rate proposed by Rep. Delaney. Another proposal from the last Congress — the Transportation Empowerment Act (TEA) — won almost universal praise from conservative groups, but almost universal condemnation from actual highway users.
Sponsored by Sen. Mike Lee, R-Utah, and Rep. Tom Graves, R-Ga., TEA would gradually reduce the federal gas tax and the Highway Trust Fund with the idea of giving control over transportation funding and projects to the individual states. Although TEA made little headway in the 113th Congress, it remains a potent enough idea in the 114th Congress that a coalition of 38 associations and businesses — including AAA Inc., the American Trucking Associations (ATA), the U.S. Chamber of Commerce and the National Association of Manufacturers — felt compelled to send an open letter to Congress March 16, urging all members to oppose TEA and other “devolution” proposals.
“TEA doesn't 'empower' states,” the letter said. “It saddles them with 90 percent of the fiscal responsibility for supporting highways that, under the Constitution, the federal government is obligated to help maintain.” TEA wouldn't allow states to retain the revenue that currently goes to the Highway Trust Fund, the letter said.
“Under devolution, this money simply goes away, forcing state and local governments to replace tens of billions of dollars with tax increases or redirection of their existing resources,” it said.
Although the National Governors Association (NGA) did not sign the March 16 letter, its most recent position statement on transportation and infrastructure — dated Feb. 23 — left little doubt that the group would also oppose TEA.
“A strong federal-state partnership is critical for our nation's transportation and infrastructure systems, because all levels of government have a role in transportation,” the NGA said. Nevertheless, all options for funding transportation and infrastructure must be on the table, because existing funding mechanisms are no longer adequate, the NGA said.
Speaking on behalf of the NGA, North Carolina Gov. Pat McCrory elaborated on the organization's transportation and infrastructure positions in March 17 testimony before the House Transportation and Infrastructure Committee, saying “previous surface transportation reauthorizations and short-term legislative extensions have created uncertainty at the national level.
“This triggered necessary and pragmatic actions at the state level to maintain and develop our vital infrastructure.”
Gov. McCrory said he will ask the North Carolina legislature for a $1.2 billion transportation revenue bond as part of the state's 25-year “vision plan.” That does not mean, however, that he believes the state alone should be responsible for transportation funding.
“Part of the solution must be continuation of a strong, flexible and reliable federal program, which currently makes up almost 28 percent of our total transportation budget,” he said.