October 11, 2011

GOP weighing expanded energy development to fund infrastructure programs

Fees, royalties, and taxes could flow to Highway Trust Fund, top lawyer says.

By Mark B. Solomon

House Republicans are considering opening up federal lands and offshore locations to expanded oil and gas development as a way to generate revenue to fund infrastructure improvements, a leading transportation attorney said last week.

James H. Burnley IV, a prominent lawyer and lobbyist who served as transportation secretary during the last two years of the Reagan administration, told the Council of Supply Chain Management Professionals' Annual Global Conference in Philadelphia that expanded energy drilling and development activities would generate fees, royalties, and increased tax revenues that could be dedicated to the Highway Trust Fund, the program used to finance infrastructure programs.

In an e-mail to DC Velocity prior to the conference, Burnley acknowledged that the proposal would be "controversial." He added, however, that it "is the first new idea in quite a while" designed to generate new revenue to pay for road and bridge improvements.

Such a plan would likely come under attack from environmentalists as well as from those who believe no one industry should be singled out as a revenue source for highway programs. Last year, President Obama proposed to pay for infrastructure improvements by stripping the U.S. oil and gas industry of two popular tax breaks. The proposal went nowhere.

The latest proposal comes as House and Senate lawmakers wrangle over legislation that would reauthorize funding for the nation's highway programs. Rep. John L. Mica (R-Fla.), chair of the House Transportation & Infrastructure Committee, has proposed a six-year, $238 billion reauthorization whose funding would not exceed revenues that come into the Highway Trust Fund, which is financed from excise taxes on gasoline and diesel fuel. The Senate has proposed a two-year, $109 billion reauthorization that would keep funding mostly at current levels.

Opponents of the House proposal say the funding levels don't come close to meeting the nation's daunting infrastructure needs and will slash the number of highway projects and cost thousands of jobs. Opponents of the Senate proposal say its proposed funding levels will add to the nation's budget deficit and are not of a long enough duration to allow states and localities to do long-range planning.

Speaker of the House John Boehner (R-Ohio) has become a sudden force in the process, directing Rep. Mica to find $15 billion in additional annual revenue to be earmarked for the Trust Fund. Burnley, a long-time skeptic of the reauthorization process, told DC Velocity that Speaker Boehner's interest "may make a difference" in moving the process forward.

On Sept. 30, Congress passed a six-month extension to reauthorize the Trust Fund, the eighth short-term extension in two years. At the time, Rep. Mica vowed that this latest extension would be the last.

About the Author

Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

More articles by Mark B. Solomon

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