What Are (Realistic) Options For Federal Transportation Funding?

With the unlikely possibility of the Congressional conference committee agreeing to a new transportation bill, much less an agreement to address the decreasing gas tax revenues to the Highway Trust Fund, Kathryn Wolfe looks at the remaining options.

2 minute read

May 16, 2012, 10:00 AM PDT

By Irvin Dawid

Wolfe reviews President Obama's and Congress' inability to address the nation's infrastructure crisis, specifically to fund the investments necessary. Noting that the funding problems are hardly new, she notes that "the last transportation bill (SAFETEA-LU), enacted in 2005, ordered up a blue-ribbon commission tasked with studying the financing problem and making recommendations for how to fix it."

Wolfe points to the Senate's current transportation bill, noting that it fails to provide the amount of funding ($225 billion annually) nor the annual increases in the gas tax of 5 to 8 cents for 5 years that the National Surface Transportation Policy and Revenue Study Commission recommended.

Instead, Congress and Obama continue SAFETEA-LU's approach to transportation funding of kicking the can down the road instead of fixing it, as Obama might have done early on. "Obama's first substantive policy decision related to the transportation bill after taking office was to push for an 18-month extension instead of getting behind then-House Transportation and Infrastructure Committee Chairman Jim Oberstar's bill." Wolfe sees "little reason to think that a viable long-term financing solution is achievable in 15 months or less".

What choices are available to address the financing shortfall? Forget about about raising the gas tax, and a vehicle-miles-traveled fee is not realistic in the short term.

"The default option may end up being an increasing expansion of tolling on interstates or greater construction of toll roads. Or Congress may decide to simply make transportation spending all discretionary instead of the current special class of spending it now enjoys, making it subject to the vagaries of the annual appropriations cycle.

That's an option the transportation lobby really doesn't want to contemplate - but it's a real one nonetheless."

Thanks to Eugene Wilson

Sunday, May 13, 2012 in Politico

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