Washington Insider

By Collin Long, OOIDA director of legislative affairs

By now, you’ve probably heard that President Donald Trump is aggressively promoting a $1 trillion infrastructure package to reinvigorate the American economy and spur job growth.

The president’s call for robust investment in infrastructure was a signature feature of his campaign and has remained a top legislative priority since his election. With health care reform mired in controversy and an overhaul of the U.S. tax code looking more and more difficult to achieve, many lawmakers have shifted their focus to advancing a strong infrastructure bill.

While details of the proposal remain scarce, there is certainty the package would provide funding for a wide variety of infrastructure over the next 10 years, including everything from highways and airports to VA hospitals and broadband.

In case those last two items didn’t tip you off, this package is not to be confused with a traditional highway bill. Highway bills focus specifically on surface transportation and are typically considered every five years – give or take. Instead, the president’s infrastructure package will be a one-time shot in the arm of increased funding for every mode of transportation and more.

The plan is to use $200 billion in direct federal investment to leverage an additional $800 billion in private, state and local funding. If you’re concerned about how the federal government will use this direct investment to generate potentially hundreds of billions of dollars in private funds, you’re not alone.

The Trump administration’s determination to expand the use of public-private partnerships, or PPPs, as a means to finance a significant portion of the $1 trillion package is problematic for anyone who uses the nation’s highways on a regular basis, such as OOIDA members.

Truckers know all too well that these types of financing schemes often lead to increased tolling on our roads and bridges. President Trump hasn’t been coy in his support for tolling either. In his initial budget request to Congress earlier this year, the president supported the tolling of existing interstates, saying elected officials should “…allow the states to assess their transportation needs and weigh the relative merits of tolling assets.”

Tolling is a loser for truckers and the driving public. Professional drivers know the current user fee-based funding structure is the most reliable, effective mechanism for building and rehabilitating roads and bridges. Research has shown that tolling is extremely inefficient, with as much as 20 percent of incoming revenue going to administrative costs rather than to the maintenance and improvement of roads. Additionally, toll roads fail to meet revenue projections so consistently it’s amazing anyone believes in their potential profitability.

While OOIDA has long supported using the existing gasoline and diesel tax to provide long-term sustainability to the Highway Trust Fund (HTF), which is the traditional source of funding for surface transportation projects, proposals to increase these fees – either by a flat amount or indexing to inflation – have proved to be political landmines for most elected officials. OOIDA and coalition partners in the Alliance for Toll Free Interstates (ATFI) need to make sure lawmakers understand how unpopular increased tolling is with the trucking industry and the driving public.

Another option for generating the revenue necessary for a robust infrastructure investment package is the concept of repatriation, which allows businesses to bring overseas profits back to the U.S. at lower tax rates. Several elected officials from both parties have proposed devoting revenue derived from repatriated profits specifically to infrastructure. While this may seem like a silver bullet solution, several factors raise serious concerns about repatriation’s viability.

First, no one is certain just how much revenue could be generated. Mandating businesses to repatriate overseas profits is the only reasonable way to estimate how much revenue can be generated, but this approach is strongly opposed by the business community and is not considered politically feasible.

The materialization of a detailed infrastructure package remains months away. In the meantime, Congress will need to determine how – or even if – $1 trillion in funding can be produced. Over the next several months, OOIDA will be working hard to ensure that elected officials understand how various funding and financing proposals would affect professional drivers. LL