“Every stakeholder in the transportation industry … has been waiting for this report to come out.”
January 15, 2008
By Jim Snyder
Business groups are looking at Tuesday’s release of a transportation study as a start-your-engines moment to what is likely to be one of the most aggressively lobbied highway bills in recent memory.
A panel of public and private officials who reviewed the country’s transportation needs for the past two years wrote the long-awaited report. Congress formed the National Surface Transportation Policy and Revenue Study Commission in the last highway bill.
“Every stakeholder in the transportation industry … has been waiting for this report to come out,” said Janet Kavinoky, director of transportation infrastructure at the U.S. Chamber of Commerce.
“Nothing like this has been done before,” said Rosario Palmieri, vice president for infrastructure policy at the National Association of Manufacturers.
The report will examine all four components of the transportation infrastructure system: freight rail lines, highways and bridges, ports, and mass transit systems.
The current highway bill lasts until 2009, but lobbyists anticipate the debate over surface transportation will begin this year given the rising importance of transportation bottlenecks on operating costs. An anticipated $4 billion shortfall in transportation accounts in 2008 is also likely to drive the transportation debate on Capitol Hill.
One key element of the debate is whether the gas tax should be significantly increased to help pay for new spending.
Under the plan endorsed by a majority of panel members, the federal share of transportation spending would increase from 37 percent to 40 percent, according to one lobbyist.
There is a broad coalition of forces arrayed in support of tax increases, but increasing the gas tax is likely to remain politically difficult.
“A special commission came up with an old, cold, bad idea,” said Sen. Chuck Grassley (R-Iowa), the ranking member on the Senate Finance Committee. “This is a disappointment and probably even a big waste of tax dollars,” Grassley said in a statement anticipating the panel’s report.
Transportation lobbyists said the committee itself was split on the need to raise taxes. The Bush administration opposes a tax hike, and current Transportation Secretary Mary Peters reportedly is one of the panel members to have argued against raising taxes as a way to spend more on infrastructure.
However, groups like NAM and the U.S. Chamber of Commerce, normally allergic to tax hikes, in this case have joined contractors, civil engineers and others in support of higher user fees.
“This is a priority for [our members] as the costs for logistics are increasing much faster than they have before,” Palmieri said.
The issue of infrastructure spending “has never been more important to them. It is very high on the agenda,” he said.
He noted one estimate that congestion adds $8 billion a year in prices for consumer goods.
Kavinoky, who is also the executive director of Americans for Transportation Mobility, one of several infrastructure coalitions formed in anticipation of the next highway bill debate, defended the tax.
“Right now, a user fee is the simplest and most straight-forward way to collect revenues,” she said.
Even though the bulk of the new money would come from an increased gas tax, long the mainstay in transportation funding, business lobbyists also anticipate the report will recommend the sort of paradigm shift they were looking for.
One lobbyist, for example, expected the report to call for the creation of a permanent commission that would develop a transportation bill through a process that mirrors the Base Closure and Realignment Commission method Congress adopted to handle the politically sensitive work of closing military bases.
Under that scenario, Congress would approve or reject the commission’s transportation report. But lawmakers would not be able to amend the legislation.
The report is also expected to advocate for a performance-based matrix that would tie funding to improvements in safety, congestion and maintenance efforts.
“That is the equivalent of a massive earthquake in transportation policy,” Kavinoky said.
Kavinoky said federal dollars are distributed by program with little regard to how the money will improve performance.
A variety of other funding mechanisms are expected to be proposed by panel members to improve system performance.
Those are likely to include public-private partnerships for toll roads that are controversial in some quarters, and a transit tax to support expansion of public transportation programs.
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