In the first of a series of Congressional hearings that will lay the groundwork for Congress to draft infrastructure legislation, the House Transportation and Infrastructure Committee on Feb. 7 heard from elected officials as well as members of the private sector. Among those who testified were Former Secretary of Transportation Ray LaHood and UPS Freight President Rich McArdle, who testified on behalf of the U.S. Chamber of Commerce.
During the hearing, which lasted more than six hours and included 10 witnesses, lawmakers and panelists agreed that the United States needs significant investment in its infrastructure in order to close existing funding gaps and compete economically in the future. But they differed widely as to how such infrastructure funding problems should be solved both now and for the long-term.
Infrastructure is something Congress will consider a lot this year, but chances for comprehensive infrastructure legislation in 2019 are slim. Such legislation would require bipartisan cooperation, which has been difficult to achieve in recent years, and the highly volatile political landscape makes it virtually impossible to move any meaningful legislation on Capitol Hill.
Of importance to NATSO members, witnesses were pressed to address their positions on various funding options, including whether increasing the motor fuels taxes, tolling or public private partnerships were viable methods for funding the nation’s long-term infrastructure needs. “We all know we need it,” Rep. John Katko (R-N.Y.) said, but “how would we fund it?”
NATSO has long supported enhanced investment in surface transportation infrastructure, but believes direct federal spending -- rather than private sector capital -- is necessary to do it effectively. NATSO supports increasing the federal motor fuels taxes, which represents the most efficient and equitable method of collecting revenues, and strongly opposes tolling existing Interstate Highways and commercialization of rest areas, both of which harm businesses and the communities in which they operate.
UPS Freight President Rich McArdle said the vast majority of Americans would support an increase in the motor fuels tax and that any funding mechanism should be equitable. “Any time I hear a focus on freight, my radar goes up,” McArdle said.
McArdle cited proposals by both the Chamber of Commerce and the American Trucking Associations for increasing gas and diesel taxes. The Chamber is calling for increasing the gas and diesel taxes by 5 cents a year in each of the next 5 years for a total of 25 cents and indexing the tax for inflation and for future increases in fuel economy. The proposal would raise $394 billion over the next 10 years, he said.
ATA also has called for an adjustment in the federal fuel tax, arguing it is the most efficient, equitable, and logical manner to increase transportation infrastructure investment in a budget-neutral fashion.
The ATA’s Build America Fund plan calls for a federal fuel usage fee built into the price of wholesale transportation fuels collected at the terminal rack, phased in at a nickel per year over four years. The fee would be indexed to both inflation and improvements in fuel efficiency, with a 5 percent annual cap.
The Committee asked Tim Walz, the Governor of Minnesota who testified on behalf of the National Governors Association, to report back on how many state Governors would support an increase in the motor fuels taxes. Responding in the affirmative, Walz added that the Governors Association has not taken a formal position on that issue.
UPS also recommended that Congress examine a federal registration fee for electric vehicles to ensure that as the electric vehicle market continues to grow they contribute their fair share of infrastructure revenues. Currently 20 states have a registration fee on EVs, UPS said.
It was clear through the hearing that there remains a contingent, primarily in the Republican Party, that views tolling as a viable alternative to raising motor fuel taxes. Most of the tolling battlegrounds have been at the state level, including Rhode Island, Virginia and Indiana. Indiana abandoned efforts to toll existing Interstates amid strong opposition, including from NATSO and its allies. The Virginia General Assembly tabled efforts to toll I-81 this legislative session to further study the issue after a tolling proposal faced strong opposition. ATA and several other companies currently are suing the Rhode Island Department of Transportation in federal court after the state opened a series of truck-only tolling gantries on Interstate 95.
Although the issue of commercializing rest areas was not widely discussed, in listing public private partnerships within the state of Maryland, Congressman Anthony Brown (D-MD) spoke favorably about the state’s commercial rest areas on Interstate 95. Commercial rest areas are prohibited under federal law except for 14 states, including Maryland, where rest areas selling food, fuel or other commercial services predated the federal ban.
On the same day that the House T&I Committee held its hearing, NATSO led a group of 15 trade associations representing off-highway communities, businesses, alternative fuel advocates and the National Federation of the Blind in urging Congress to oppose efforts to commercialize Interstate rest areas as they consider infrastructure legislation this year. [Read the letter here.]
Former DOT Secretary Ray LaHood told the Committee that lawmakers can draft "all the big, bold plans you want," but ultimately it wouldn’t advance without the support of the President.
"I think the House has the ability to pass a big bold plan, and I think the Ways and Means Committee will try to find the money for you," LaHood said. "But If President Trump is not with you on this, then it's going to be very difficult to pass in the Senate. If he's with you ... I believe he will help sell it to the Senate," LaHood said. "And if that happens, boom, America is back in the business of building roads and bridges."
LaHood also urged lawmakers to act quickly on infrastructure saying that if it doesn't happen this year, it won’t happen until after another Presidential campaign.
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