Highway tax increases or spending cuts? What about both?

By David Tanner, Land Line associate editor | Wednesday, February 12, 2014

A Senate committee that will play a major role in drafting the next highway bill could see the first draft as soon as April – even though it will be missing a key component.

Sen. Barbara Boxer, D-Calif., who chairs the Environment and Public Works Committee, says she’s confident the committee will be marking up bill language this spring, even if the bill will not include a new funding mechanism at this stage. That funding language will be drafted by the Finance Committee.

Members of the EPW Committee and guests at a hearing on Tuesday, Feb. 12, offered a few ideas to help things along, but mainly the hearing focused on the needs of the transportation system and nothing concrete about how to fund it.

Heads of the U.S. Chamber of Commerce and AFL-CIO testified that increasing fuel taxes would provide the fairest and most equitable source for transportation funding, as long as the money stays dedicated to highways, bridges and transit.

“Voters want to know where the money is going and that it’s not going to be wasted,” Chamber President Tom Donohue said.

Sen. Jeff Sessions, R-Ala., questioned the need for a tax increase of any kind, saying Congress should focus on spending cuts to fix the shortfall in the Highway Trust Fund.

Mike Hancock, president of the American Association of State Highway and Transportation Officials and secretary of the Kentucky Transportation Cabinet, said plugging the shortfall should likely be a combination of spending cuts and revenue increases.

“Congress could address the projected annual shortfalls by substantially reducing spending for surface transportation programs, by boosting revenues, or by adopting some combination of the two approaches,” Hancock stated in his testimony.

According to AASHTO, sustaining the current investment levels in transportation would cost the average American household about $10.23 more per month.

Putting off the work to highways and bridges will not make the problems go away, Richard Trumka, president of the AFL-CIO, said.

“A bridge that is deficient today will not be any better tomorrow,” Trumka said.

Panelists Peter Ruane of the American Road and Transportation Builders Association and Jay Timmons of the National Association of Manufacturers also testified in favor of building up America’s transportation systems to benefit the economy.

Without five or six years of dedicated funding that a new highway bill would provide, states and businesses are left with uncertainties that hinder economic development, they said.

Boxer said whether it’s a fuel tax increase or some type of tax on miles traveled, she favors five or six years of dedicated funding.

“I think we should keep the user fee concept because it does give that kind of certainty,” she said.

In addition to funding infrastructure, the next highway bill will also set policies for motor carrier safety and other transportation programs that affect trucking.

The U.S. House Transportation and Infrastructure Committee has begun its hearing process to arrive at a new highway bill sometime this summer.

The current highway bill, MAP-21, expires in September. The U.S. Department of Transportation says the Highway Trust Fund could go into the negative sometime in August, right before the next bill is due to be passed.

Historically, Congress takes its time in passing a final version of a highway bill. MAP-21, a two-year bill approved in 2012, is the official replacement for the prior bill, SAFETEA-LU, which expired in 2009.

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