Wednesday, January 16, 2008

"It has become absolute orthodoxy within the conservative movement that you cannot raise any taxes. In this instance, I don't see any alternative."

Study: Toll roads alone won't pay for U.S. highway needs

Bipartisan panel says Congress will need to increase gas tax

January 15, 2008

The Dallas Morning News
Copyright 2008

A federal commission created by Congress called for big increases to the federal gas tax on Tuesday as part of a sweeping overhaul of how America builds and pays for its highways, bridges and transit systems.

The proposal for a 40-cent increase over five years touched off a stormy debate in Washington that is expected to last until at least 2009, when legislation governing scores of transportation programs expires and must be rewritten.

In Texas, Gov. Rick Perry condemned the proposals.

"Washington is still mired in old-school bureaucratic thinking," Mr. Perry said in response to Tuesday's long-awaited report by the National Surface Transportation Policy and Revenue Study Commission. "Washington is clearly incapable of meeting today's transportation demands, so why should anyone believe they can handle tomorrow's?"

With Mr. Perry as governor, Texas has been among the nation's strongest advocates for giving states more authority to partner with private companies to build highways as toll roads. Dozens of new toll roads have been proposed in Texas, and his administration has routinely rejected calls for higher gas taxes.

Mr. Perry's strong reaction Tuesday reiterates his long-standing support for aggressive pursuit of private toll financing, and puts him in lock-step with the Bush administration. Though U.S. Secretary of Transportation Mary Peters led the panel, on Tuesday she rejected its call for higher gas taxes.

Ms. Peters signed the report but joined the two other administration appointees on the panel in issuing a dissenting statement opposing higher gas taxes. Like Mr. Perry, Ms. Peters believes the federal government should reduce the role it plays in building America's roads. Instead, both want to give states greater freedom to partner with private companies to meet those needs.

"Raising gas taxes won't improve traffic congestion, it will only perpetuate our ineffective reliance on fossil-based fuels to fund infrastructure and send more of Americans' hard-earned money to Washington to be squandered on earmarks and special-interest programs," Ms. Peters said.

But all nine of the members appointed by Congress in 2005, including five appointed by Republicans, say new taxes are critical.

"I am a die-hard conservative Republican," panel member Paul Weyrich, founding president of the conservative Heritage Foundation, said at a news conference Tuesday. "And it has become an absolute orthodoxy within the conservative movement that you cannot raise any taxes. Well, in this particular instance, I don't see any alternative."

Reform in 2009

None of the report's recommendations are binding for Congress. But its release prompted comment from all sides of the national debate over taxes and tolls. It is widely expected to frame the discussion between now and 2009 over how to fix the nation's aging and inadequate network of roads, bridges and rail lines.

Legislation that governs federal transportation programs expires next year, and the new laws that will be needed will probably be among the most heavily debated in Congress. Committee hearings begin this month.

The panel wants Congress to raise the federal gas tax – currently at 18.4 cents a gallon – by 5 to 8 cents a year for five years, and then allow the rate to grow with inflation after that. By then, drivers would be paying $6 extra for every 15-gallon tank. The panel also wants state gas taxes increased.

That's too much, said Carrollton resident Jon Moore.

"We are taxed to death already. It costs more to eat, to drive, to live. Every year, the property taxes go up on our houses," said Mr. Moore, who is self-employed and commutes as little as possible. "It cost $75 just to register a car each year. Why is that? If we use too much water, they tack on a penalty. If we use too little water, they raise the rate. ... Everyone wants more no matter how many repossessions are taking place."

Sen. Kay Bailey Hutchison, R-Texas, also rejected the idea of raising the federal gas tax.

"With Americans paying more than $3 per gallon at the pump and the economy teetering on a recession, we should be providing tax relief, not imposing a tax that has the greatest impact on lower- and middle-class families," her spokesman Matt Mackowiak said.

Jack Schenendorf, the commission's vice chairman, acknowledged that voters and lawmakers are reluctant to pour money into a system he described as broken.

"We believe that it [the gas tax] can be raised, but only if you go to the people with a clear mission with what you are going to use it for," he said. "All of us believe that the federal program needs to be fundamentally changed."

Other major recommendations include a complete reorganization and streamlining of the federal transportation system.

The panel wants spending on U.S. transportation infrastructure to nearly triple to at least $225 billion a year for the next 50 years.

"This is going to take political leadership," Mr. Schenendorf said. "We have concluded that our surface transportation system in America is at a crossroads. We have a looming crisis coming. A failure to act would be catastrophic to this nation."

Government's role

Ms. Peters and Mr. Perry are not alone in arguing that the federal government wastes the money it now has and shouldn't be rewarded with large new taxes. Others who support the panel's call for a continued federal leadership role in transportation say higher taxes are the wrong approach.

U.S. Rep. John Mica, the ranking Republican on the House transportation committee, said big gas-tax increases are a bad idea.

"While I respect their hard work and efforts, the commission's recommendation of a dramatic increase in the gas tax does not stand a snowball's chance in hell of passing Congress," said Mr. Mica, who has visited Dallas frequently in the past few years to discuss what he calls a looming crisis in transportation funding.

In an interview, he said Congress could support indexing the gas tax to inflation but suggested more emphasis be placed on leveraging what funds it gets by issuing bonds and partnering with the private sector to build toll roads.

So-called public-private partnerships have been a centerpiece of Mr. Perry's approach since he first took office. Since then, dozens of tolls roads have been proposed for Texas, and many of them will be eligible to be built by private companies. The Spanish firm Cintra is developing the first phase of the massive Trans-Texas Corridor, and private firms are expected to bid this year to build six new toll lanes on LBJ Freeway in Dallas.

Twenty-three states let private companies partner with governments to build toll roads or bridges, the report said. In all, 31 states have tolled structures of one type or another.

But the report also urges states to impose restrictions on contracts with private firms, something advocates of so-called public-private partnerships say the companies will find onerous.

Robert Black, spokesman for Mr. Perry, said restrictions on such deals should not be imposed from Washington.

"The governor sees this report as Washington, D.C., trying to implement a top-down, one-size-fits-all approach," he said. "Instead, it should free the states up to decide which restrictions it wants to impose. It ought to be the state's prerogative, not the federal government's."

One aspect of the report that would give states more authority to toll both new and existing interstates drew criticism from Ms. Hutchison.

"Taxpayers should never be asked to pay twice for a highway," said her spokesman, Mr. Mackowiak.

  • Raise federal gas taxes by up to 40 cents per gallon by 2014
  • Raise overall transportation spending by all governments to at least $225 billion a year – nearly triple the current level
  • Allow states to toll new and existing interstates, particularly in major metro areas
  • Encourage private toll roads, but with new limitations
  • Save money by reducing the time it takes to build major projects

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