RSSThe 5565 American Road & Transportation Builders Association (ARTBA) has outlined a detailed proposal it believes could end the political impasse over how to fund future federal investments in state highway, bridge and transit capital projects.
The ‘Getting beyond gridlock’ plan would marry a 15 cents-per-gallon increase in the federal gas and diesel motor fuels tax with a 100 per cent offsetting federal tax rebate for middle and lower income Americans for six years. The plan, ARTBA says, would fund a US$401 billion, six-year highway and mass transit capital investment program and provide sustainable, user-based funds to support it for at least the next ten years.
“If our national leaders think they need to use budget gimmicks or ‘one-offs’ again to pass the surface transportation investment program the states need and the business community has been pleading for, then use those devices to provide a $90 tax rebate to middle and lower income tax filers to offset the cost to them of a 15 cent per gallon increase in the federal gas tax,” ARTBA president and CEO Pete Ruane said in announcing the plan. “Don’t use them to just prop up the program for a few years. That won’t resolve the structural damage that’s been done to the Highway Trust Fund, nor will it allow states to do the long-range capital planning that the nation needs.”
ARTBA has long maintained that an increase in user fees, specifically the federal motor fuels excise rate, is the most efficient way to resolve the Highway Trust Fund (HTF) cash flow problem, now about US$15 billion per year, and raise revenue needed to fund expanded capital investments in freight mobility and traffic congestion relief over the next decade. That has also been the recommendation of two blue ribbon commissions mandated by the Congress and the National Commission on Fiscal Responsibility and Reform (Simpson-Bowles) appointed by President Obama.
But so far, the politics of a user fee increase has been a stumbling block. ARTBA says its proposed plan addresses that.
“Our proposal provides an answer for those who believe Americans are not willing or able to invest another $90 a year to improve their mobility and help keep the cost of just about everything they buy down,” Ruane said, noting traffic congestion increases the cost of transportation for businesses because time is money. “Those costs are being passed on to consumers.”
He noted the proposed additional gas tax cost over a year “is less than we all pay each month for cell phone service.” He added, “I submit the mobility we get from our modest, individual contributions to transportation infrastructure improvements is an outstanding return on investment.”
In modelling its plan, ARTBA used the5541 US Energy Information Administration’s 2014 forecast for domestic motor fuel consumption and vehicle miles travelled over the next six years, the 831 Federal Highway Administration’s (FHWA) data on the volume of motor fuel taxed, the US Bureau of Labor Statistics inflation forecast, the US Census Bureau’s population projection, and US Treasury Department and Internal Revenue Service tax collection and filing data.
ARTBA says a 15 cent motor fuels tax increase would generate an additional US$27 billion per year for Highway Trust Fund (HTF) investments and claims its model shows that this would end the eight-year HTF revenue crises cycle.
With the additional revenue, ARTBA says, the existing core highway and transit programs would keep pace with forecasted inflation. Given that the FHWA forecasts truck traffic will increase 56 per cent between now and 2040, ARTBA recommends using a significant portion of the remaining newly generated user revenue, about US$12 billion per year, to fund federal investments in multi-modal capital projects that upgrade the US freight network and help reduce traffic congestion bottlenecks on it.
“Two years ago with MAP-21, Congress did its job and enacted significant highway and transit program reforms that help ensure, going forward, federal investments are strategic, data and performance driven, transparent and utilized with accountability,” Ruane said. “MAP-21 also set the stage for a new strategic initiative to upgrade the U.S. Freight Network with capital projects that have national and regional significance. The only thing lacking was the funding to move forward. This plan provides it.”
The ARTBA executive also pointed out the proposal “gives the Congress additional time to fully explore, and if deemed appropriate and workable, transition to other user-related mechanisms that have been discussed for funding future transportation infrastructure investments—like dedicated energy development fees, per barrel or refinery fees, VMT fees or Interstate tolling.” “Meanwhile, state programs and the mobility of US businesses and all Americans won’t be held hostage to indecision in Washington,” he added.
“We hope this is helpful to Congress and the Administration as they get serious about a real solution that doesn’t just dig out of the huge hole that has been created, but also starts making the bold capital investments necessary to help U.S. businesses and show Americans real results. If there is a better plan out there that puts the surface transportation program back on solid ground over the next ten years with a sustainable growth trajectory, then let’s move on it now. The time for cogitating and fretting is over. The clock is ticking.”
The ‘Getting beyond gridlock’ plan would marry a 15 cents-per-gallon increase in the federal gas and diesel motor fuels tax with a 100 per cent offsetting federal tax rebate for middle and lower income Americans for six years. The plan, ARTBA says, would fund a US$401 billion, six-year highway and mass transit capital investment program and provide sustainable, user-based funds to support it for at least the next ten years.
“If our national leaders think they need to use budget gimmicks or ‘one-offs’ again to pass the surface transportation investment program the states need and the business community has been pleading for, then use those devices to provide a $90 tax rebate to middle and lower income tax filers to offset the cost to them of a 15 cent per gallon increase in the federal gas tax,” ARTBA president and CEO Pete Ruane said in announcing the plan. “Don’t use them to just prop up the program for a few years. That won’t resolve the structural damage that’s been done to the Highway Trust Fund, nor will it allow states to do the long-range capital planning that the nation needs.”
ARTBA has long maintained that an increase in user fees, specifically the federal motor fuels excise rate, is the most efficient way to resolve the Highway Trust Fund (HTF) cash flow problem, now about US$15 billion per year, and raise revenue needed to fund expanded capital investments in freight mobility and traffic congestion relief over the next decade. That has also been the recommendation of two blue ribbon commissions mandated by the Congress and the National Commission on Fiscal Responsibility and Reform (Simpson-Bowles) appointed by President Obama.
But so far, the politics of a user fee increase has been a stumbling block. ARTBA says its proposed plan addresses that.
“Our proposal provides an answer for those who believe Americans are not willing or able to invest another $90 a year to improve their mobility and help keep the cost of just about everything they buy down,” Ruane said, noting traffic congestion increases the cost of transportation for businesses because time is money. “Those costs are being passed on to consumers.”
He noted the proposed additional gas tax cost over a year “is less than we all pay each month for cell phone service.” He added, “I submit the mobility we get from our modest, individual contributions to transportation infrastructure improvements is an outstanding return on investment.”
In modelling its plan, ARTBA used the
ARTBA says a 15 cent motor fuels tax increase would generate an additional US$27 billion per year for Highway Trust Fund (HTF) investments and claims its model shows that this would end the eight-year HTF revenue crises cycle.
With the additional revenue, ARTBA says, the existing core highway and transit programs would keep pace with forecasted inflation. Given that the FHWA forecasts truck traffic will increase 56 per cent between now and 2040, ARTBA recommends using a significant portion of the remaining newly generated user revenue, about US$12 billion per year, to fund federal investments in multi-modal capital projects that upgrade the US freight network and help reduce traffic congestion bottlenecks on it.
“Two years ago with MAP-21, Congress did its job and enacted significant highway and transit program reforms that help ensure, going forward, federal investments are strategic, data and performance driven, transparent and utilized with accountability,” Ruane said. “MAP-21 also set the stage for a new strategic initiative to upgrade the U.S. Freight Network with capital projects that have national and regional significance. The only thing lacking was the funding to move forward. This plan provides it.”
The ARTBA executive also pointed out the proposal “gives the Congress additional time to fully explore, and if deemed appropriate and workable, transition to other user-related mechanisms that have been discussed for funding future transportation infrastructure investments—like dedicated energy development fees, per barrel or refinery fees, VMT fees or Interstate tolling.” “Meanwhile, state programs and the mobility of US businesses and all Americans won’t be held hostage to indecision in Washington,” he added.
“We hope this is helpful to Congress and the Administration as they get serious about a real solution that doesn’t just dig out of the huge hole that has been created, but also starts making the bold capital investments necessary to help U.S. businesses and show Americans real results. If there is a better plan out there that puts the surface transportation program back on solid ground over the next ten years with a sustainable growth trajectory, then let’s move on it now. The time for cogitating and fretting is over. The clock is ticking.”
