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May 25, 2015

Posts in "Highway Trust Fund"

March 16, 2015

Here’s The Need, Where’s The Money?

Sen. Kelly Ayotte, R-N.H., will chair a hearing on the TSA budget for FY 2016 Tuesday. (Photo By Chris Maddaloni/CQ Roll Call)

Sen. Kelly Ayotte, R-N.H., will chair a hearing on the TSA budget for FY 2016 Tuesday. (Photo By Chris Maddaloni/CQ Roll Call)

Congress is another week closer to the May deadline for re-authorizing highway and mass transit spending.

What that means: if lawmakers don’t pass an authorization bill before May ends, then the Highway Trust Fund would be paying out money to the states at a much slower pace than normal, which would hinder or halt projects during the spring and summer construction season.

This week most of the Obama administration’s transportation officials will be testifying on Capitol Hill at appropriations hearings.

Tuesday the Senate Commerce, Science and Transportation Subcommittee on Aviation Operations, Safety and Security hears from Melvin Carraway, acting administrator of the Transportation Security Administration about the Obama administration’s Fiscal Year 2016 TSA budget request and issues such as the effectiveness of the TSA’s Pre-Check program for trusted travelers.

The chairwoman of the panel is Sen. Kelly Ayotte, R- N.H., who is up for re-election in 2016.

Meanwhile the Federal Aviation Administration chief Michael Huerta will testify to the House appropriations subcommittee on Commerce, Justice, Science, and Related Agencies.

Also Tuesday, the House Transportation and Infrastructure Committee gets the state and local perspective from North Carolina Gov. Pat McCrory, Salt Lake City Mayor Ralph Becker, and  Wyoming Department of Transportation director John Cox.

On Wednesday, Transportation Secretary Anthony Foxx testifies before the Senate Appropriations Subcommittee on Transportation.

Finally on Thursday, the House Appropriations Subcommittee on Transportation hears from Gregory Nadeau, acting head of the Federal Highway Administration, Therese McMillan, acting head of the Federal Transit Administration, National Highway Traffic Safety Administration chief Mark Rosekind, and Maritime Administration chief Paul Jaenichen.

The administration witnesses are sure to make the case for budget certainty and for a long-term infrastructure funding solution. The latter is looking less and less likely in 2015.

February 24, 2015

Vendors Look To Reap Revenues From User Fee System

Traffic in Los Angeles: a future revenue source for data vendors? (Photo: Gabriel Bouys/AFP/Getty Images)

Traffic in Los Angeles: a future revenue source for data vendors? (Photo: Gabriel Bouys/AFP/Getty Images)

The shift from the gasoline tax to mileage-based user fees which Oregon is launching this year, which California will be testing in 2017, and which other states may follow isn’t just a way for states to pay for transportation infrastructure, it’s a business opportunity for vendors such as Verizon Telematics and Sanef.

Telematics, data collection, and information technology companies envision a world in which, if drivers agree to turn over their driving data to the vendor, they get the benefits of:

  • usage-based insurance (which could give more precise evidence of one’s safety as a driver than current insurance systems);
  • remote vehicle diagnostics;
  • emissions reporting (without having to go into a state emissions station for onsite testing);
  • monitoring of teenage drivers in your family to make sure they aren’t going 95 miles per hour down the interstate highway.

Oregon’s pilot program involves only 5,000 vehicles and has three vendors running it. The state now is subsidizing those vendors.

Full story

Blumenauer: Replace Gas Tax With Road Usage Charge

Rep. Earl Blumenauer, D- Ore. (Photo By Tom Williams/Roll Call)

Rep. Earl Blumenauer, D- Ore. (Photo By Tom Williams/Roll Call)

Speaking to the second annual conference of the Mileage-Based User Fee Alliance on Tuesday, Rep. Earl Blumenauer, D – Ore., pitched the idea of pairing an increase in the gasoline tax with a pilot program to support state experiments in taxing drivers by how many miles they drive.

Oregon is launching a voluntary mileage-based fee program in July.

Blumenauer proposes a gas tax increase of 15 cents a gallon, phased in over three years and indexed to the Consumer Price Index. This “can be the last time Congress ever has to act to raise the gas tax. And then I want to get rid of the gas tax, because it doesn’t work over the long haul.”

Alluding to Oregon being the first state to impose a tax on gasoline in 1919 and the state’s current experiment with a mileage-based fee (also known as a vehicle-miles-traveled tax, or a road usage charge), Blumenauer added, “for ten years the state that gave you the gas tax has been piloting projects to show how you can get rid of it.”

Full story

February 23, 2015

Week Ahead: Tolling, Flight Tracking, Energy Shipping

Sen. James Inhofe, R- Okla., and Rep. Bill Shuster, R- Pa., will both address the AASHTO conference this week. (Photo By Bill Clark/CQ Roll Call)

Sen. James Inhofe, R- Okla., and Rep. Bill Shuster, R- Pa., will both address the AASHTO conference this week. (Photo By Bill Clark/CQ Roll Call)

It will be a busy week in Washington for transportation policy, with hearings, speeches, and panel discussions on everything from better tracking of airline flights to tolling on interstates.

Tuesday

The Mileage Based User Fee Alliance holds its second annual conference in Washington.

The Alliance includes state departments of transportation and contractors in the tolling business. Panelists will discuss such topics as California’s Road Usage Charge Pilot Program.

Full story

February 20, 2015

Week In Review: Derailment, Delay, And Delta’s CEO

Delta CEO Richard Anderson (Photo credit Mandel Ngan/AFP/Getty Images)

Delta CEO Richard Anderson (Photo credit Mandel Ngan/AFP/Getty Images)

This week was dominated by the derailment of an oil train near Mount Carbon, W.V. The accident, which caused explosions and fires and destroyed one house, illustrated the risks that towns and cities face as Bakken crude from North Dakota makes the journey from the oil well to the tank of your car.

Full story

February 19, 2015

Devolution For Transportation A Long-Term Strategy

Rep. Lee Zeldin, R- N.Y. (Photo By Tom Williams/CQ Roll Call)

Rep. Lee Zeldin, R- N.Y. (Photo By Tom Williams/CQ Roll Call)

The conservative Heritage Foundation and its political arm Heritage Action want Congress to spend the money in the Highway Trust Fund on highways and not on subways, commuter trains, and other forms of mass transit.

Heritage transportation analyst Emily Goff said that current policy directs up to 20 percent of the money in the Highway Trust Fund to mass transit even though only 5 percent of commuters use mass transit. Most of the money that goes into the trust fund comes from gasoline and diesel taxes.

“How does the transit ride of someone in New York benefit someone who is a farmer in Montana who is using the roads?” she asked Wednesday at a Heritage briefing.

The think tank would like to devolve the federal transportation programs to the states. Goff said “letting the states who want to pursue transit do so” would result in better transit systems since states would design them to fit their needs and fund them themselves.

Full story

February 13, 2015

Thinking The Unthinkable About Mass Transit Funding

Rep. Garret Graves, R- La., a skeptic about using Highway Trust Fund money for mass transit. (Photo By Tom Williams/CQ Roll Call)

Rep. Garret Graves, R- La., a skeptic about using Highway Trust Fund money for mass transit. (Photo By Tom Williams/CQ Roll Call)

At the height of the Cold War, defense analyst Herman Kahn wrote Thinking About the Unthinkable, a book which tried to inform readers about what would happen in a nuclear conflict.

When it comes to mass transit funding, “thinking about the unthinkable” is the idea that Congress might someday cut off money from the Highway Trust Fund (HTF) which has been spent on subways, bus systems, and other forms of mass transit since the 1980s.

Approximately 80 percent of HTF money is spent on highways and 20 percent on mass transit.

Most of the roughly $40 billion a year that goes into the trust fund comes from taxes on gasoline and diesel fuel paid by people who drive cars and trucks.

At a hearing Wednesday of the House Transportation and Infrastructure Committee, some Republican members skeptically quizzed Transportation Secretary Anthony Foxx about why HTF money must go to mass transit, and whether the funds would be better spent on highways.

On Thursday, American Public Transportation Association President Michael Melaniphy fired back.

“There has been bipartisan support for federal investment in public transportation through the federal gas tax since 1983 when, under President Reagan, fuels tax revenues were dedicated to public transportation through the Mass Transit Account of the surface transportation legislation,” he said.

Full story

February 9, 2015

Friday Q & A: Harvard’s Mihir Desai, Part Two

Interstate 405 freeway during bridge repair work in 2011 in Los Angeles. (Photo by Kevork Djansezian/Getty Images)

Interstate 405 freeway during bridge repair work in 2011 in Los Angeles. (Photo by Kevork Djansezian/Getty Images)

Here are more excerpts from our interview with Harvard Business School finance professor Mihir Desai on the movement toward using revenues from taxing overseas profits to fun infrastructure.

It sounds like you would agree with part of what Rep. Delaney is proposing. Tax past earnings, but not future earnings?

What’s really important to me is that we get the corporate tax on a good footing, and it’s in a very bad place… We have the highest statutory rate… we’re not raising much money, and our international provisions are extremely complex and raise very little money.

And our system is very distinct from the rest of the world which makes [the United States] an inhospitable place for our companies to be incorporated, as we’ve seen via the inversion wave.

My primary concern is not about the stock of previous earnings. My primary concern is: how do we use this as an opportunity to get the corporate tax on a good footing?

Full story

February 6, 2015

Week In Review: Struggling With Rivals and ‘Trolls’

Copies of President Obama's Fiscal Year 2016 budget await distribution in the Senate Budget Committee room Monday (Photo By Tom Williams/CQ Roll Call)

Copies of President Obama’s Fiscal Year 2016 budget await distribution in the Senate Budget Committee room Monday (Photo By Tom Williams/CQ Roll Call)

Running through our stories this week was the theme of struggle, the competitive fray, the battle between contending forces.

Since we’re in Washington, D.C., of course there’s the inevitable struggle between the executive and legislative branches over political power and the interpretation of law.

Rep. Janice Hahn, D-Calif., told us that in the Water Resources Reform and Development Act (WRRDA), enacted just last year, “We laid out a very reasonable, common-sense goal of increasing what we’re spending every year” on harbor dredging and port maintenance.

But Hahn said President Obama’s proposed Fiscal Year 2016 budget “decreases what we’re spending every year and in fact in 2025 is only proposing that 30 percent of all the money we collect would be returned to the ports.”

And we described another legislative vs. executive struggle over a new tank car standard which the Pipeline and Hazardous Materials Safety Administration has yet to deliver, creating regulatory uncertainty among railroads, shippers, and car manufacturers.

A sardonic Rep. Peter DeFazio, D- Ore., said at a House hearing Tuesday the rule is “lost somewhere in the bowels of the administration between the agency and the trolls over at the Office of Management and Budget who will further delay the ruling.”

Then there’s the struggle between major U.S. airlines and Persian Gulf competitors such as Emirates over the terms of Open Skies agreements were intended to allow fairly free and open competition.

The U.S. air carriers are asking the Obama administration to consider re-negotiating those deals, alleging that Gulf air carriers are government subsidized.

Another form of struggle is the eternal one of labor versus management. We saw it this week in the West Coast port managers’ standoff with the International Longshore & Warehouse Union over a new contract.

Pacific Maritime Association President Jim McKenna as he warned that ports from Los Angeles to Seattle were at “the brink of collapse” due to union work slowdowns.

Friday Q & A: Harvard’s Mihir Desai, Part One

Mihir Desai, professor of finance at Harvard Business School (Photo: Harvard Business School)

Mihir Desai, professor of finance at Harvard Business School (Photo: Harvard Business School)

There’s growing bipartisan interest in tapping a new source of revenue to pay for highways, light rail systems, and other infrastructure: the nearly $2 trillion of U.S. corporations’ earnings now held overseas.

Presidet Barack Obama has proposed a one-time tax of 14 percent on those earning. Others have similar ideas — Rep. John Delaney, D- Md., has introduced legislation that  would tax overseas earnings at 8.75 percent and invest the revenue raised from that tax in infrastructure.

But as infrastructure funding becomes entangled in the effort to enact corporate tax reform, the complexities will grow.

There are voices of caution. One is Mihir Desai, a professor of finance at Harvard Business School and a professor of law at Harvard Law School.

Here are excerpts of our conversation with Desai Thursday, starting with his comment on the need for broad corporate tax reform:

Clearly, infrastructure is a great need.

The question is, from a system-wide perspective, do we want to be moving towards what’s more like what the rest of the world has, which is a territorial [tax] system where we don’t tax the profits that are earned by our companies overseas, or whether we want to move more towards a worldwide system, which we have now, but even maybe strengthening it, via the Delaney proposal or otherwise.

In general, I think movement towards a territorial system is the way to go.

Full story

February 5, 2015

Heritage: Focus Highway Spending On Highways

Cars on Interstate 280 in San Francisco. (Photo by Justin Sullivan/Getty Images)

Cars on Interstate 280 in San Francisco. (Photo by Justin Sullivan/Getty Images)

A book of government cost-cutting ideas offered by the conservative Heritage Foundation on Thursday includes a big one for transportation: limit spending from the Highway Trust Fund only to the amount of revenue the fund collects from federal highway taxes.

Eight-five percent of those revenues come from gasoline and diesel fuel taxes, but there is some revenue from excise taxes on trucks, trailers, and truck tires.

Heritage says its idea would save $179 billion over 10 years.

The Heritage Budget Book said that “Congress diverts at least 25 percent of HTF dollars to non-road, non-bridge projects, including bicycle and nature paths, sidewalks, subways and buses, landscaping, and related low-priority and purely local activities.”

Instead, it said, Congress should limit trust fund spending to the roughly $39 billion collected from the gasoline, diesel, and other highway taxes “and refocus the federal highway program to encompass only Interstate Highway System maintenance and expansion, and a few other federal priorities, letting the states or private sector take over the other activities if they value them.”

This, the foundation said, “would free up valuable HTF money for road and bridge projects that will benefit those motorists paying for the program in the first place.”

The Congressional Budget Office noted in its annual forecast last week, federal spending on highways and mass transit has been running at about $53 billion a year.

CBO estimates that the revenues from federal taxes on gasoline and diesel which go into the Highway Trust Fund will stay at $38 billion to $39 billion a year from now until 2025.

Full story

February 2, 2015

Obama Budget Plan Fills In Infrastructure Details

Crews work on a freeway overpass in Novato, Calif. (Photo by Justin Sullivan/Getty Images)

Crews work on a freeway overpass in Novato, Calif. (Photo by Justin Sullivan/Getty Images)

Last year President Obama said in his budget proposal that he wanted to use revenue raised from overhauling taxes on corporations to pay for infrastructure.

This year’s budget proposal will fill in the details of how Obama proposes to do that.

Essentially, according to administration officials, he seeks to impose a tax on foreign earnings that U.S. companies have earnings stashed overseas, ending the deferral that they now use to postpone paying taxes on that money.

We won’t know for months what, if anything, of this proposal will emerge from Congress. But momentum does seem to be growing to use overseas profits to help pay for highways and other infrastructure.

Full story

January 30, 2015

A Look Back: Cuomo, Coons, Coal, Climate Change

A bulldozer operates atop a coal mound in Shelbiana, Ky. (Photo by Luke Sharrett/Getty Images)

A bulldozer operates atop a coal mound in Shelbiana, Ky. (Photo by Luke Sharrett/Getty Images)

This week we looked at the buzz over a new revenue source for the nation’s highways and transit systems. Sen. Rand Paul, R- Ky., Sen. Barbara Boxer, D- Calif., Rep. John Delaney, D- Md., and others are proposing ways to tax repatriated profits and fill the Highway Trust Fund.

Think big – $170 billion, Delaney says. We’re a long way from a committee markup, but things seem to be moving.

We also used the appearance of Henry Kissinger before the Senate Armed Services Committee to revisit the perennial struggle of “guns versus butter,” or America’s overseas commitments versus its domestic needs (like subways, buses, and tunnels).

Kissinger once worked for a man who said, “Until we make public transportation an attractive alternative to private car use, we will never be able to build highways fast enough to avoid congestion.” That was in 1969. Are we there yet?

As well as congestion this week we also examined Cuomo, climate change, Chris Coons, and coal.

In that order:

  • Gov. Andrew Cuomo of New York ordered highways closed and commuter railroad and subway service to halt at 11pm Monday in the face of a blizzard, which in the end turned out to be a bit underwhelming, at least in New York. We looked at the economic winners and losers from the storm.
  • The Senate voted to disagree with the idea that “more frequent and intense extreme weather events” are damaging the nation’s highways, subways, and ports. It voted to kill an amendment to the Keystone XL pipeline bill offered by Sen. Chris Coons, D- Del., that he said “simply acknowledges that climate change is having an impact on our infrastructure” and doesn’t blame humans for it.
  • Burning coal to produce electricity allowed me to write this and allows you to read it, at least if you’re in one of the regions of the country where coal is heavily used, as in the Mid-Atlantic States. Burning coal produces carbon dioxide and, many scientists say, it contributes to climate change.

But railroads make money by moving coal from mine to power plant.

We heard this week from Norfolk Southern how a decline in coal shipments is hurting the railroad’s bottom line.

Obama Transportation Proposals: Deja Vu All Over?

President Obama and Transportation Secretary Anthony Foxx tour the Metro Transit Light Rail Operations and Maintenance Facility in St Paul, Minn. last February. (Photo: Jewel Samad/AFP/Getty Images)

President Obama and Transportation Secretary Anthony Foxx tour the Metro Transit Light Rail Operations and Maintenance Facility in St Paul, Minn. last February. (Photo: Jewel Samad/AFP/Getty Images)

President Obama presents his Fiscal Year 2016 budget proposal on Monday.

You’d probably not be off course if you were to read his transportation proposals from last year, almost none of which has yet been enacted, to get an inkling of what initiatives he’s going to offer.

The FY16 blueprint seems likely to be a revival of much of last year’s agenda.

The inescapable topic, of course, is a new source of revenue to pay for highways, bridges, and mass transit systems.

There’s momentum building for some method of taxing U.S. corporations’ overseas profits to pay for infrastructure.

Full story

Overseas Cash Alluring Idea For Infrastructure Funds

Rep. John Delaney, D - Md., during his 2012 campaign. (Photo By Bill Clark/CQ Roll Call)

Rep. John Delaney, D – Md., during his 2012 campaign. (Photo By Bill Clark/CQ Roll Call)

In his Fiscal Year 2015 budget last March, President Obama said he wanted to use “one-time transition revenue resulting from business tax reform” to pay for highways, roads and transit systems.

Now Rep. John Delaney, D- Md., has introduced a bill that fills in details of a concept about which Obama, House Speaker John Boehner, and several others have been thinking aloud: pay for infrastructure with tax revenue from repatriated profits of U.S. corporations.

But Delaney said his bill is “much more comprehensive” than what Obama sketched out last March.

Delaney’s measure would impose an 8.75 percent tax on overseas profits and would, he said, raise $170 billion, more than enough to both fill the shortfall in the Highway Trust Fund for six years and to create a new $50 billion infrastructure funding entity.

It would also give Congress what he called “a nice long runway” for lawmakers to devise ways to cope with the anticipated decline in revenues from taxes on gasoline and diesel fuel.

Full story

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