Next Move Is Congress' in Transportation Funding Saga

Transportation advocates all agree on the need to boost the country's spending on roads, bridges and transit. But they, like Congress, are split on how to pay for it.
by | April 29, 2015

Congress has until May 31 to find a way to pay for a long-term plan to improve the nation's roads, bridges and transit systems. And as in years past, the story is the same: It can't seem to agree on one approach. But even transportation advocates struggle with how to pay for new roads. The different stances show just how tricky Congress' job can be.

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Take the Obama administration's proposal. It wants to pay for a six-year program by taxing the overseas profits of American companies. The idea has more support on Capitol Hill than previous administration proposals, but it is a complex topic that could require rewriting the federal tax code.

The idea with the most support in the transportation industry -- from road builders to the U.S. Chamber of Commerce to the motorists' group AAA -- is simply raising federal fuel taxes, which still remain at 1993 levels. Historically, fuel taxes provided the bulk of funding for federal transportation spending. The AFL-CIO, one of the groups that backs a gas tax hike, says the federal gas tax, which now stands at 18.4 cents a gallon, should be raised another 15 cents over three years, with future increases automatically tied to inflation. But many in Congress see a tax hike of any kind as a political nonstarter.

Meanwhile, state and local officials have been more circumspect. National groups, in particular, face the same sorts of ideological and geographical splits as Congress. The American Association of State Highway and Transportation Officials (AASHTO), for example, isn't even backing a specific proposal. "For an association like ours, representing all 50 state [departments of transportation], the District of Columbia and Puerto Rico, it's very difficult for us to get behind one solution," said Jim Tymon, the group's deputy director of policy and management.

AASHTO wants Congress to find a "sustainable" funding source that won't decrease in buying power over time, as fuel taxes do. It has identified more than 30 options for raising new revenue, highlighting the advantages and disadvantages of each. The group also provides rough estimates of how much different revenue sources could bring in. For example, a 5.6 percent sales tax on gasoline would bring in $155 billion over five years, while a $2.50 tax on bicycle tires would take in far less -- just $530 million -- in the same period. "We've done the hard work in determining what each of these options would yield from a revenue standpoint," Tymon said. "We can tell Congress: Pick one. Pick one or two or three. Pick something and get the numbers to work."

The American Public Transportation Association (APTA), which represents transit agencies, is also largely staying out of the debate on how to pay for a new program. Instead, it is focusing on advocacy. "You have to know where your wheelhouse is," explained Michael Melaniphy, the group's president and CEO. For transit agencies, he said, that means making the public aware of the scope of the problem.

They recently held "Stand Up for Transportation" rallies in dozens of cities including Denver. Phillip Washington, the group's chair, said Congress knows the strengths and weaknesses of different funding options better than transit administrators do. "That is why we elected them to Congress," he said, "to wade through all of those things as we run our systems."

But Edward Wytkind, president of the AFL-CIO's Transportation Trades Department, said Congress is a long way from weighing specific proposals. Lawmakers' main goal, according to Wytkind, is to keep the Highway Trust Fund from running out of money this summer. Since the last long-term surface transportation law expired in September 2009, Congress has passed 32 short-term fixes to keep transportation money coming to the states. But it never looks at how to significantly increase transportation spending in the long run. "We end up always debating the same thing, which is: 'Oh gosh, how are we going to stop the insolvency from happening?'" Wytkind said. "Meanwhile, when you do stop the insolvency from happening, you're not growing the pie. You're running on a treadmill to nowhere."