Report Calls for Ad Valorem Tax to Fund Transportation; More Reaction to Mica’s Transportation Plan; Other News of Note
The Carnegie Endowment’s Leadership Initiative on Transportation Solvency has a new report out this month that suggests a five percent ad valorem tax on oil up-stream and gas downstream could help cover the cost of transportation in the United States. Meanwhile, reaction to the transportation authorization proposal offered last week by House Republicans continued to pour in this week from transportation stakeholders and other interested observers. Plus there is news this week on Georgia’s regional transportation referendum and an anti-toll initiative in Washington state. And the first post-moratorium public-private partnership transportation project in Texas has attracted a lengthy list of potential suitors.
The Carnegie report was assembled under the bipartisan leadership of former U.S. Senator Bill Bradley, former Pennsylvania Gov. and Secretary of Homeland Security Tom Ridge and former U.S. Comptroller General David Walker.
The report, titled “Road to Recovery: Transforming America’s Transportation,” says an ad valorem tax could not only raise needed revenue for transportation infrastructure but also “exert a countercyclical effect on prices at the pump.”
The ad valorem tax could be applied to oil imports and oil production as long as world oil prices are rising. When oil prices decline, the fee could instead apply to retail sales of gasoline.
The report also recommends banning transportation earmarks and establishing a national infrastructure bank. Consolidating duplicative or outdated federal transportation programs among the 108 currently on the books could also produce benefits. And, as other recent reports have also recommended, this one recommends increasing accountability by establishing performance metrics to ensure that transportation projects are cost-effective, necessary and promote long-term economic growth.
More Reaction to Mica Transportation Authorization Plan
I blogged last week about the transportation authorization proposal put forth by House Transportation and Infrastructure Committee Chairman John Mica and House Republicans. Since then, we’ve heard and read a lot more viewpoints on the plan. Here’s a roundup of some of them:
- The National Journal Transportation Experts Blog has reaction to the Mica plan from former Transportation Secretary Norman Mineta (he’s “discouraged and apprehensive about the low funding levels suggested in the legislation.”), American Society of Civil Engineers Executive Director Patrick Natale (he says that “by unveiling the proposal, Chairman Mica has begun the conversation in earnest on Capitol Hill and has allowed debate on funding levels to commence.”), American Public Transportation Association President William Millar (he believes the proposal “would severely underfund critical elements of the federal transit program.”), and Reason Foundation Director of Transportation Studies Bob Poole (he salutes the plan for refocusing the Highway Trust Fund on the Interstates and the National Highway System and for emphasizing an expanded TIFIA program, which could give states the opportunity to leverage their investments. But he believes the legislation should give states more self-help tools, including the ability to toll existing interstates).
- American Trucking Associations President & CEO (and former Kansas Gov.) Bill Graves also weighed in. “Like other highway interests, ATA would like to see a more robust bill, but we believe the current funding constraints are forcing an important re-focusing of the surface transportation program on core programs in the national interest, as well as a greater emphasis on improving program efficiency and performance,” he said in a statement. “We are very pleased to see the level and type of reforms Chairman Mica lays out, particularly those prohibiting tolling of existing interstates, maintaining funding for highway safety programs, maintaining a policy of no earmarks, eliminating requirements on States to fund non-highway activities; and consolidating programs.”
- American Highway Users Alliance President and CEO Greg Cohen offered this: “We wish highway funding levels were higher, but we think it’s important that, rather than cut all programs equally, (Mica) took a courageous step in saying ‘No’ to many of the special interest groups that wanted to hold the money in Washington or mandate wasteful diversions. By eliminating earmarks for Members of Congress and the Obama Administration, funding in the bill will be distributed more quickly to States as part of a new ‘performance-based’ transportation program.”
- Transportation Issues Daily had this collection of reaction from stakeholder groups to the Mica plan.
- DC Streetsblog had more reaction here and here.
- House Democrats on the Transportation & Infrastructure Committee released a chart which they say shows how much less funding each state would receive over six years if the Mica proposal becomes law.
- A Sacramento Bee editorial this week weighs the merits of the Mica plan versus the two-year plan proposed by California Sen. Barbara Boxer: “Clearly, an OK Senate bill, providing two years of certainty, would be better than a bad House bill that would lock in massive cuts for six years. Under the House proposal, California would see a drop from $3.4 billion this year to $2.2 billion next year for highway repair and construction. Multiply that over six years. That really hurts in this economy, where construction jobs have plummeted.”
- Virginia Gov. Bob McDonnell expressed his support for the Mica plan this week, despite some estimates that Virginia could receive a 30 percent cut in federal transportation funds under the plan, The Washington Post reports. McDonnell said only a small portion of Virginia’s transportation plan relies on federal funds. The state is borrowing $3 billion over three years to help fund 900 transportation projects.
- “Greece is having a fire sale of its publicly-owned transportation system, with planes, trains and roads all being sold off as the country attempts to dig out of its debt crisis,” writes Lisa Schweitzer, an associate professor in the School of Policy, Planning and Development at the University of Southern California, in a Los Angeles Times op-ed this week. “Americans should watch and learn: We could well be privatizing large segments of our own transportation system soon because of the U.S. debt crisis.” Schweitzer warns that Mica’s authorization plan, which she calls a draconian proposal, opens the doors for privatization projects and that’s a bad thing in her estimation. “Rushing to privatize state-owned assets can lead to terrible infrastructure deals that let private companies walk away with prime assets and leave taxpayers with no guarantee of better services or lower fees,” she writes. For Schweitzer, the track record of privately run transportation projects is decidedly mixed. “For every successful privatization story of service improvement and mounting profits—Britain’s airport privatization, say—there’s a disaster story of poor service and taxpayers left holding the bailout bag: think the Chunnel or Chicago’s privatized parking woes. Privatized transportation projects carry risks for both sides.” You can read more from Schweitzer on her blog, including her responses to questions from readers of the Times piece. And speaking of the Chicago privatized parking deal, which is often mentioned these days as an important P3 failure in the United States (and which reportedly inspired U.S. Sen. Dick Durbin of Illinois to introduce legislation recently to rein in the sale of transportation assets to private companies), I recently ran across a 2009 series from the Chicago Reader in which the deal and its aftermath are dissected. You can read the three part series here, here and here.
- Donna Cooper of the Center for American Progress writes that Mica’s plan to slash transportation spending doesn’t make sense, particularly in light of last week’s announcement of the anemic jobs numbers for June (which followed the announcement of Mica’s plan by a day). “(Mica) and his leadership stand behind a bill that actually reduces the level of federal investment in infrastructure,” she writes. “The result will be a reduction of at least 100,000 private-sector jobs annually, small-business closures, and increased likelihood of tragic road and bridge failures.” Cooper took part in a CSG webinar as part of our Growth and Prosperity Virtual Summit of the States this spring (which you can watch here).
- The Hill newspaper points out that the Mica bill actually produced a rare consensus between the U.S. Chamber of Commerce and the AFL-CIO. They both decried the lack of funding. “It is astonishing and unconscionable that the House Republican leadership would push a surface transportation re-authorization bill that would gut current infrastructure investment by a third and obliterate over half a million jobs in the next year alone,” said AFL-CIO President Richard Trumka in a statement. The Chamber’s Janet Kavinoky called the investment levels “unacceptable.” “Cuts will destroy—rather than support—existing jobs and will not enable creation of the additional jobs needed to put the 16.3 percent of unemployed workers in the construction industry back to work.”
- School Transportation News Online points out that the Mica bill would eliminate the Safe Routes to School Program.
Other Transportation News of Note
- There is talk in Georgia of moving the date of the vote on regional sales taxes to fund transportation projects next year to help improve their chances of success. The Atlanta Journal-Constitution’s political insider Jim Galloway writes about it in this post. Susan McCord of the Augusta Chronicle writes this week about the challenges of prioritizing transportation projects in the Augusta area in advance of the vote. The Citizen.com meanwhile looks at the Atlanta Regional Transportation Roundtable’s work to narrow down their list of projects and what it means for neighboring Fayette County, Georgia.
- By the way, Georgia transportation officials may be able to find some good news in the analysis of a national phone survey about tax options for funding transportation released by the Mineta Transportation Institute. The survey revealed that Americans are more willing to support higher gas taxes or a new mileage fee if the additional revenue is tied to specific transportation investments.
- In my article on transportation and trade in this month’s issue of Capitol Ideas, I write about how officials in Washington state argue that new tolls may be necessary to help fund a new I-5 bridge over the Columbia River but a conservative political activist named Tim Eyman could stand in the way of that plan. Well, it now appears that Eyman turned in enough signatures earlier this month to put a measure on the 2012 ballot that could put new restrictions on tolls in the state. Eyman’s initiative would call for ending tolls on a road or bridge once the project’s construction is paid off and require tolls to stay at the same price all day (rather than rise and fall at different times of day and according to different congestion levels—which is known as congestion pricing). The initiative would also reinforce state laws that keep tolls on one road or bridge from being used to pay for another project and call for the legislature rather than the state Transportation Commission to set toll rates. Eyman believes toll rate decisions should be made by state legislators that the public can throw out of office if they so choose rather than by the “unelected bureaucrats” on the commission. There is more about the initiative in this article from The Olympian newspaper. The Seattle Times reports this week that Washington is considering tolling the I-5 express lanes through North Seattle. Officials believe toll revenue could support $185 million in construction bonds to help pay for repairs and improvements on the interstate.
- I blogged recently (see here and here) about the Texas Department of Transportation’s Request for Information from private infrastructure firms to build and operate the Grand Parkway, a proposed 184-mile outer loop in the Houston area also known as State Highway 99. The Houston Chronicle reports this week that TxDOT received RFI submissions from 23 companies or groups including Spanish toll road developer Cintra/Meridiam and China Construction America, a subsidiary of China State Construction Engineering Group. The complete list of companies can be found here, though their submissions were not made public.