Monday, August 31, 2015

Federal Surface Transportation Update

Congress may be creeping toward a long term solution to the Federal Highway Trust Fund revenue problem, at least for the next six years, according to my conversation with Sixth District Congressmn Peter Roskam (R. Ill.) a member of the House Ways and Means Committee, which is charged with responsibility for appropriating money to fill the gap between the nation's needs for road, bridge, waterway and transit construction and repair, and the declining revenues generated by the federal motor fuel taxes dedicated to keeping America moving. Congressman Roskam agrees that the 34 consecutive short term appropriation patches for the Trust Fund are a poor substitute for the traditional funding Congress used to provide six years at a time. Without the ability to predict federal shares of highway, bridge, waterway and transit funding over the long term, state and local governments are crippled in their planning for needed repair and construction projects which usually last more than a year from initial planning through completion.

Primarily because of the Congressionially enacted CAFE fuel economy standards, and also because folks tend to drive less when the economy is sluggish, taxes generated on gasoline and diesel fuel have declined dramatically in recent years, although the costs of highway, transit and waterway construction projects continue to increase. As a result, the gap between motor fuel tax revenue and the funds needed for surface transportation infrastructure construction and repair projects continues to grow each year. According to Representative Roskam, the majority of the Ways and Means Committee is looking toward legislation which would reduce the income tax rate on repatriated foreign earnings of U. S. corporations, and would dedicate the expected resulting tax revenues to the Highway Trust Fund.

However, it remains to be seen whether such an appropriation bill from the House would pass in the Senate, since such a six year funding measure would not address the need for additional Highway Trust Fund revenues in future six year appropriation periods. 
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