Senior Transportation Advisor to RAILCETHouse-Senate and the Surface Transportation Trust Fund. Currently the House is working behind the scenes on a 6 year Surface Transportation Act that would allocate roughly $45 to $50 billion per year over six years (depending on the tax offsets that can be found). The Senate is working on a two year bill that that spends $54 billion per year. The Senate has reportedly identified an offset, although it has not been made public. The Senate Environment & Public Works Committee has scheduled a mark-up for November 9 when they are expected to report the bill out to the Senate Floor. The Senate “offset” will almost certainly not be a gas tax increase. The House Plan to Bolster Financing House Republicans are exploring options to bolster surface transportation funding. Last week, the Chairman of the House Transportation Committee hinted there is consideration being given to replacing the current per-gallon gas tax with a new revenue system. That would be a dramatic shift. The Republican position in the House has shifted in the last few weeks in the direction of greater infrastructure spending. Earlier this year, the Republican House passed a resolution to limit the new six-year highway/transit bill to revenue generated by the gas tax—about a 30% cutback from previously authorized SAFETEA-LU levels. Key stakeholders including the construction groups, trade unions and the Chamber of Commerce were opposed to passing a six year bill at the low numbers. As reported last week, Mica now has a commitment for the House Leadership to look for major sources of new revenue. By getting this agreement, Mica has made a breakthrough and removed the biggest obstacle to crafting a long-term bill. Mica has been consistent that “a gas tax increase is off the table.” However, for over a year he has been informally discussing other ways to raise enough money to keep highway programs funded at current levels or even higher. At a Washington Post conference last week, Mica said he is exploring options to augment the current Highway Trust Fund receipts that are built mainly from taxing gasoline and diesel fuel. However, “there’s also the possibility of doing away with it and adopting something else,” he said. As I have reported earlier, one option the GOP is evaluating is a capturing of new revenue for transportation from oil drilling income. However, at a retreat two weeks ago that I attended, Mica and Speaker Boehner both indicated informally there are “scoring and other issues” with the energy source for transportation revenues. A Plan to Double the Revenues for Infrastructure Investment? There is some discussion in Republican circles of a GOP Jobs bill that would double investment available transportation infrastructure above current levels. Under this concept, which is being considered by Chairman Mica, Congress would double the money for infrastructure investment available above the hard dollars going into the trust fund. This would produce a program of about $100 billion per year over 6 years. It would be done by adding a substantial component of soft financing such as tax credits (which would also be scored and require offsets) and innovative finance—an expansion and streamlining of RRIF and TIFIA loans. The “soft financing” would also be seen as a spur to attract private investment in P3 projects as a part of a national objective to jump start a round of public-private partnerships to fund major transportation projects. Such a program of tax credits could well be a very attractive benefit to spur participation by infrastructure construction companies in P3 projects as well as to encourage transit oriented development where increased value capture could help fund the rail operation. Trust Fund Flexibility for Rail? – In addition to seeking new revenue sources, both House and Senate transportation committees are pursuing a number of substantive reforms that will end federal categories of spending and give states far more flexibility in committing funds between to transportation categories. In the past intercity passenger and freight rail projects have been largely excluded from the highway/transit trust fund because railroads do not pay into the gas tax that finances the trust fund. However, the political reality is that future increased trust fund financing will not come from come from a gas tax increase but from general funds freed up by tax reform or other sources. If the offset comes from general revenues in which all taxpayers participate in (including railroads) the rail construction segment should lobby to assure that the states are given maximum flexibility to finance freight and passenger rail public interest projects along with highway and transit projects. Two examples: First there are commuter rail new starts and upgrades being planned all over the country. In the early planning federal grants were being counted on to finish projects. In the deficit environment we have now, increasing federal grants are simply not going to be available. Full flexibility for existing federal grant funding plus innovative finance for P3s could go a long way to close the gap. Second, there are about 18 state subsidized intercity passenger routes. The states both provide capital and an operating subsidy to these passenger operations. The days of the large federal stimulus grants are over—but the states are committed. The states should be given maximum flexibility to put capital into those lines or into public interest freight programs such as the Chicago Create project. Again—RAILCET should seek a competition amendment for construction projects.
Previous Postings
|
|
