When federal lawmakers return to Capitol Hill next month, one of their first assignments will be the normally routine task of finding money for better roads and rails. But given Congress’ recent track record of letting seemingly mundane matters build to a crisis, transportation experts are keeping a wary eye on Washington.
The reason for the concern is the expiration of two key transportation-related statutes. At the end of September, the law providing for a federal gas tax expires. So, too, does the law that authorizes aid for building and repairing roads, subways and bridges. In the past, when the issue has come down to the wire, Congress has simply voted itself more time while it figured out a plan.
But that’s not a given any more. When it comes to transportation funding, Republicans in the U.S. House and Democrats in the Senate have drafted plans that are miles apart philosophically. Hardly anyone expects that they will be able to reach agreement by the end of September. The question is whether they can agree to give themselves an extension, and on what terms.
Jack Basso of the American Association of State Highway and Transportation Officials is not panicked yet. “We believe members of Congress, particularly congressional leadership in both houses, understand the importance of these programs to the economy and the jobs market,” he says. The federal gas tax, which stands at 18.4 cents a gallon, brings in an enormous amount of money for local construction projects and the jobs that come with them, Basso notes.
Gas tax fight
A new highway bill has been on Congress’ to-do list since the last major rewrite expired in 2009. Since then, the lawmakers have more or less kept the same plan on the books through seven different extensions.
“We’ll get another extension. I’m extremely — about 99 percent — certain,” says Robert Poole, director of transportation policy at the Reason Foundation, a libertarian group. He says so despite recent reports that anti-tax groups would fight for the outright elimination of the federal gas tax. Poole believes the idea of bringing the gas tax to a halt — along with the federal highway program that depends on it — is “a complete pipe dream.”
One of the groups pushing for the end of the federal gas tax is Americans for Tax Reform, the influential anti-tax organization that made its presence felt during the recent debt ceiling debate. Mattie Corrao, ATR’s manager of government affairs, says the group does want to see the end of the federal gas tax, but it is pushing a gradual approach.
But she says members of Congress who have promised ATR not to raise taxes could vote for a gas tax extension without breaking that pledge, because the tax is already on the books.
Even if members can be persuaded to support an extension, they must deal with the fact that the federal gas tax does not bring in enough money to pay for all of the transportation projects it is now supposed to fund. Three times since 2008, Congress has had to supplement gas tax revenues by depositing extra money into the Highway Trust Fund, the primary source of federal transportation money. Those transfers add up to $34.5 billion, while the yearly total for federal transportation spending under the current highway bill is $48.8 billion.
The shortfall is expected to grow even bigger. The gas tax rate has been the same since 1993, but, because it is tied to the number of gallons sold rather than the price of gas, it has not kept up with inflation. As cars and trucks become more fuel-efficient, the gap widens.
A new debate
For the first time in years, both Democrats and Republicans will have a plan in hand shortly after Labor Day. House Republicans, led by U.S. Representative John Mica of Florida, have drafted a six-year plan that would scale back federal transportation spending to the levels brought in by the current gas tax. Depending on how you look at it, this would amount to between a 6 percent and a 35 percent reduction to states.
Poole says the drop-off is not very significant for states that planned on the end of extra stimulus money for transportation, funding that largely disappeared this summer. The states knew that stimulus support would be coming to an end. “States that have done their transportation planning that way shouldn’t have much of a problem with only 6 percent less than the average they’ve gotten per year,” Poole argues.
But David Goldberg, communications director at Transportation for America, says the Mica plan will not be enough to keep up the country’s deteriorating roads and bridges. “We cannot lock in a less-than-adequate, miserly view of what it takes to maintain and expand necessary infrastructure,” he says. “We have built an awful lot of highways out there. We built 40,000-some miles of interstates. Bridges are nearing the end of their design life all over the place.”
In the Senate, Barbara Boxer, a California Democrat, put together a plan with modest spending increases. Her plan would only last two years.
Devolving to states
Americans for Tax Reform may not be promoting an immediate end to the federal gas tax, but the group is pushing for steps to send less transportation money to Washington. Instead, states ought to control more of their own resources, Corrao argues.
“The federal government sees this as a big pot of money that they can spend on whatever projects they want,” she says. “What we’ve seen is the Highway Trust Fund abused for years, starting in the ’80s, for projects that are not highway-related… There’s no reason the people in Wyoming should be paying for the subway system in New York.”
But AASHTO’s Jack Basso says a national transportation plan is necessary in order to keep the country’s commerce flowing smoothly. The vast majority of freight, for example, travels on the highways. And the Interstate highway system, he says, requires good roads through sparsely populated states that would not be able to pay for that type of infrastructure on their own.
“The real question,” Basso says, “is can you maintain a national system, given the diversity and the breadth of geography in the country and the population situation, without some kind of national program? I think the answer is ‘No.’ “
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