By By Rep. Jon Mica (R-Fla.) - 03/12/14 12:28 PM EDT
Transportation infrastructure in the United States faces a critical challenge with the current Moving Ahead for Progress in the 21st Century Act (MAP-21) legislation expiring soon.
When we crafted that bill, our shortfall from the Highway Trust Fund was approximately $20 billion. To just maintain current levels of funding, the shortfall over the next five years is approximately $75 billion. A more immediate concern is that our states will not be able to make commitments for any sizable projects beginning sometime this summer.
Unfortunately, groups like the U.S. Chamber of Commerce and some other high-profile transportation interest groups continue to campaign for a gas tax increase, which by every honest evaluation is not going to happen. Also, the possibility of converting to a vehicle-miles-traveled system, using electronic data collection and billing, is not technically feasible at this time and is highly objectionable to many people.
One possible funding mechanism would be to abolish the gas tax and convert to a sales tax on the amount of the fuel purchased, as is now done by at least a half-dozen states. Any conversion to a sales tax must include a floor and a cap and indexing to keep revenue stabilized. This method of the user paying for his or her fair share of infrastructure cost is one alternative. Some have suggested abandoning the gas tax and looking for other sources of revenue by closing current loopholes. This remains a possibility. Every loophole, however, comes with strong opposition and a protracted battle.
Furthermore, a five-year bill would require finding more than $300 billion in loopholes, which is a very formidable task. With the shortfall in the Highway Trust Fund to finance MAP-21, more than $10 billion a year would be needed to be added to trust fund revenue, achieved by pension rounding.
Another proposal that might be considered is the devolution of federal gas tax dollars back to each state and dismantling most of the current federal programs and bureaucracy. That would require a dramatic slimming down of all federal DOT programs and reliance on individual states to deal with highway, bridge and infrastructure projects.
During the debate on MAP-21, we had originally proposed limiting the Highway Trust Fund funding to surface highway projects. Currently passenger rail, public transit and biking do not contribute revenue to the trust fund, nor do our territories. Under MAP-21, a separate account was established, temporarily funded by loophole revenue, providing a bridge in financing for five years. Transit interests and more urban area representatives would not support that proposal. In the long term, something needs to be done to ensure these other modes of transportation have some way to contribute revenue toward those systems’ construction, operation and maintenance.
In any new authorization, there are several successful methods of providing additional funding capacity, which were provided for in MAP-21. First, the Transportation Infrastructure Finance and Innovation Act, which was more than quadrupled, should be dramatically expanded. This allows limited dollars to be significantly multiplied with the same amount of money. With leverage financing, more projects can be undertaken with fewer dollars. While some progress has been made in promoting public-private partnerships, attracting private capital leveraged with bonds can help launch a new era in interstate and expensive future projects.
While we were unable to include a rail title in MAP-21, another means of increasing capital for major rail infrastructure projects is to reform the Railroad Rehabilitation and Improvement Financing (RIFF) loan front. To date, very few RIFF loans have been awarded and the loan process is cumbersome and time consuming. Changes in this program can help launch a new era in high-speed passenger rail service and take considerable burden from current limited transportation revenues.
Certainly, financing is the key to any new authorization. Congressional leadership and the Transportation and the Ways and Means committees must become engaged in finding a solution. Most urgently, with the depletion of the Highway Trust Fund and expiration of the current authorization, some action is required before the end of this summer. If not, states will begin closing down major transportation projects that rely on a federal financial commitment. I believe the Transportation Committee, working with Ways and Means and House leadership, can craft either a short-term or long-term measure to ensure that we meet our nation’s highway and infrastructure needs.
Mica has represented Florida’s 7th Congressional District since 1993. He serves on the Transportation and Infrastructure and the Oversight and Government Reform committees.