A Five-Point North Star We Can Rely on for MAP-21 Reauthorization
By Janet Kavinoky
Members of Congress are running out of time to re-authorize MAP-21, the legislation that funds America’s highway and public transit systems before it expires on May 31, and as they come back from recess and (hopefully) shift their focus to this significant need, there are five things they need to focus on to make it work.
Not all revenue sources are equal, so we need to evaluate revenue proposals to be sure they actually work. Transportation financing and funding is an incredibly complicated topic, but the lens through which we can evaluate viable funding options is surprisingly clear.
Most revenue options fall into one of two categories: 1) general taxes or 2) transportation-related taxes and fees and the Chamber uses five criteria to evaluate revenue proposals:
- Is it transportation-related? Because of special federal budget rules, if revenues are transportation-related, Congress can pass a long-term bill that provides funding certainty. Without transportation-related revenues, annual appropriations could vary dramatically. Uncertainty means transportation projects cost more and have less impact because big, high-impact projects rely on multi-year transportation funding certainty.
- Are there revenues ongoing, rather than one-time? One-time money is a band-aid, rather than a solution. This is the path Congress has taken to ‘solve’ the problem since 2009. It involves funneling money from one place to another, and does not address the HTF’s structural problems in the long term.
- Are the revenues coming from sustainable sources? We need to not only meet today’s demands on our national transportation network, but also the increasing demands we know will be placed upon that network within the next 25 years.
- Are there revenue sources adequate for full funding or, at a minimum, to maintain funding levels? In combination or by themselves we need $91 billion over the next six years just to maintain funding levels. And that won’t necessarily deal with the backlog of maintenance and construction needed to spur economic growth. Full funding, meaning what’s needed to bring our seriously outdated network of highways, bridges and transit systems up to par, and keep it that way so future generations can rely upon it.
- Can the federal government collect the revenues? There are some options, like sales taxes, that are viable at a state or local level but that the federal government cannot use. It seems basic, but this knocks out a lot of potential ideas that work well at other levels of government.
Recently, the Chamber praised the Obama Administration for putting forward its GROW America act and launching the debate over the future of transportation. The Administration’s proposal would provide transportation funding through revenue generated from taxing corporate overseas profits. But we had to call the way in which the Administration seeks to pay for its proposal ‘unacceptable.’ Here’s what I mean: it falls short on every single one of the above points. It’s not partially or mostly unacceptable; it’s wholly unacceptable. What about the other proposals that may be coming down the line? We’ll look at the viability of those if and when the detail on each is made available.
What Congress does on a surface transportation bill within the next two months matters tremendously; 52% of highway and bridge capital, and 45% of transit capital, comes from the federal government. Simply maintaining current levels of direct federal funding for highways and transit requires $91 billion in new revenues over the next six years, and it’s no secret that current levels of funding are woefully insufficient.
The Chamber opposes cutting transportation spending to fit the current revenues being deposited into the Highway Trust Fund from gasoline and diesel taxes. In addition, infrastructure projects take years to construct, about 63% of dollars that leave the HTF each year are paying obligations from prior years. So to address HTF insolvency, it would be necessary to eliminate all new funding for a fiscal year, to let the revenues “catch up” to spending. Congress has rejected such dramatic cuts to the highway and transit programs several times since 2008.
Can we agree that drastic cuts to transportation funding that states and locals rely on would be short-sighted and hurt our economy? I hope so.
Instead, the Chamber is calling on Congress to pass a long-term, fully-funded bill that will, at a minimum, maintain current federal funding levels for roads, bridges, public transportation and highway safety.
How do we pay for it all? Proposals to pay for transportation range from “ideas” (see AASTHO’s ’33 ideas’ to shore up the Highway Trust Fund (HTF)) floating around the policy community, to actual legislation (see the Administration’s GROW America Act and Congressman Earl Blumenauer’s bills).
With less than two months to go, Congress has a big job ahead of it; but when you get right down to it, they really just have to use these five points as their north star.