May 21, 2014

ATA members suggest alternate options to fund U.S. infrastructure programs

Proposal includes indexing fuel taxes to changes in Consumer Price Index, imposing "highway access fee" on all motorists.

By DC Velocity Staff

The American Trucking Associations (ATA) yesterday endorsed a series of alternative measures to fund the country's surface transport programs if Congress, as is expected, refuses to increase the federal fuels taxes, which is currently the main mechanism for paying for improvements to roads and bridges.

The smorgasbord of funding options, which were suggested by an association task force, includes indexing motor fuels taxes to changes in the Consumer Price Index (CPI) as well as the estimated impact of improved fuel efficiency. (Receipts from fuel taxes are expected to stagnate or decline as vehicles get better road mileage and make fewer fuel stops.)

Other suggestions include:

  • Issuing Treasury bonds, whose repayments would be subsidized by revenue from indexing the fuel tax;
  • Imposing an annual "highway access fee" on all motorists, including truckers;
  • Leveraging funds from the repatriation of overseas profits generated by U.S. firms;
  • Issuing a per-barrel tax on imported oil and domestic crude production; and
  • Using royalty payments from new oil and gas leases.

As a last resort, the trucking group would recommend a transfer of funds from the general treasury into the Highway Trust Fund, which pays for road and bridge projects. Over the years, Congress has repeatedly approved the transfer of funds from the general treasury to ensure the Trust Fund's financial stability.

The task force started out with about 30 funding proposals and winnowed them down to the final list, according to Pat Thomas, a vice president of UPS Inc. and vice chairman of the task force.

ATA repeated its support for an increase in motor fuels taxes, saying it remains the most equitable and efficient means of funding infrastructure projects. However, it acknowledged the political problems of persuading lawmakers to back an increase, particularly in an election year. Federal taxes on diesel fuel and gasoline have not been increased since 1993. The tax on diesel stands at 22.4 cents a gallon.

The country's infrastructure projects are currently funded under a $105 billion law that took effect in July 2012. The current law is due to be renewed by Sept. 30 of this year. However, it has been projected that the Trust Fund will run out of money by the end of August unless a new law is passed or the current law is extended.

"The work of this task force lays out what is acceptable to the trucking industry and what should be acceptable to our political leaders to address the Highway Trust Fund crisis," Bill Graves, ATA's president and CEO, said in a statement.

Sean McNally, an ATA spokesman, said the task force's work does not constitute a formal proposal. Rather, it reflects a consensus of the group's members on acceptable funding alternatives if fuel tax increases are not on the table.

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