It’s great to see the President making a serious
Reauthorization proposal, following up on the State of the Union address. Although we don’t have all the details
(White House factsheet here), the proposed program is pretty robust, with
especially strong TIGER and transit components and an emphasis on system
preservation.
The weakest part of the proposal is the financing side. The bill would be funded by $150
billion in “onetime transition revenue from progrowth business tax reform.” As I said in my remarks on the
State of the Union, there are a couple of serious problems with using “tax
reform” money. First, use of
non-user-fee funds commingles transportation budgets and general budgets in a
way that is dangerous to stable funding for transportation. Second, and perhaps more germane, I
don’t think that the “tax reform” bird will fly. The President may see tax reform as a way to raise
revenue. House Republicans see tax
reform as a way to lower tax rates in the upper brackets.
Ironically, the President’s remarks in St. Paul launching
this initiative were made on the same day as the fifth anniversary of the
transmittal of the report of the national commission set up by Congress to
recommend how to fund transportation.
Does anyone remember “Paying Our Way: A New Framework for Transportation
Finance,” published by the National Surface Transportation Infrastructure
Financing Commission?
A super-executive summary of the commission’s findings and
recommendations: The nation is facing a “large and widening gap between federal
revenue and investment needs” for transportation. The commission made a detailed examination of alternatives
and recommended (1) that Congress look toward a mileage tax as a long-term
revenue source and (2) because the needs are urgent and getting to a mileage
tax will take a while, Congress should enact a significant bump in the gas tax
now.
How did that work out?
Not well. Here we are five
years later talking about more one-time fixes.
Although conventional wisdom in Washington holds that gas
tax increases, let alone mileage taxes, are in the realm of fantasy, the good
news is that things are changing at the state level. In the past year or so, several states have enacted gas tax
increases for transportation. In
Pennsylvania and Virginia, these increases have been proposed by Republican
governors and have received significant Republican votes in the legislature.
The important point for now is that the President has made a
serious Reauthorization proposal with real (or at least potentially real) money
behind it. So I agree with AASHTO
that it is “good news” that the President is “looking seriously” at surface
transportation finance and with T4America, who are “encouraged to see the
threat to our nation’s transportation network begin to get the attention it deserves.”
Now if we could just recirculate that Finance Commission
report (yes, it is still available online here)…………..