This week continues the trend of transportation in the news. The Highway Funding Bill has been a bone of contention on Capitol Hill for some time now. With Obama and congress releasing their new budgets for fiscal year 2015, will there be money to keep the nation’s highways safe and well-maintained?
Plan Details
Part of Obama’s proposed budget will include an element called “repatriation.” This idea involves companies bringing their foreign cash reserves back to the United States and be taxed only once for it.
The plan is an expansion of the four-year $302 billion GROW AMERICA Act submitted by the administration in 2014. The plan would use the aforementioned 14 percent repatriation tax to help pay for the proposed $317 billion that the administration wants to spend on U.S. roads and bridges from 2016 through 2021.
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The senate plan also endorsed a repatriation tax and went further to add an Invest in Transportation Act that would tax a company’s foreign earnings at 6.5 percent and then funnel all of that money back into the Highway Trust Fund. House Republicans, ardently opposed to new taxes, floated the idea of expanding oil exploration as a way to help boost the Highway Trust Fund.
What Are the Chances?
Highway Funding has been a hot item on lawmaker’s to-do list this year. Just last week Transportation Secretary Anthony Foxx gave an impassioned plea to the Senate’s Environmental and Public Works Committee.
“To hell with politics,” he said. “In order for the system to be as good as the American people, we must do something dramatic.”
Those words aren’t just hyperbole considering that the Highway Trust Fund will need to be funded before May 31, or else it will dry up. In the past 10 years Congress has only been able to pass limited two-year extensions and hasn’t appeared to have the wherewithal to come up with a long-term solution.
At the hearing House Representative John Delaney (D-Md) stated that “America’s infrastructure needs to be rebuilt, re-launched and reimagined. To create jobs, compete globally and improve our quality of life, building a 21st century national infrastructure should be our top economic priority.”
While there are three plans out there, the passage of any one of them on their own still looks murky. With a divided government, compromise may end up yielding another short-term extension that kicks the Highway Funding Bill can down the road; a can that both parties have had no qualms taking their foot to.
The ATA Weighs In
Just in time to coincide with the release of the budget, the American Trucking Associations (ATA) once again bought up the specter of a fuel tax increase as a funding mechanism for the Highway Trust Fund. Their open letter to congress endorsed a “user pays” approach to the tax scheme.
The letter goes on to state that the inefficiencies caused by what they call the nation’s “crumbling infrastructure” cause a loss of 141 million trucking hours each year. They equate this to around 51,000 drivers sitting idle for an entire year.
“Rather than continuing to resort to short-term funding patches that delay tough decisions,” the letter goes on to state, “our organizations support action to address the issue pragmatically, immediately and sustainably.”
Whether or not the proposed budgets address the ATA concerns is another story. Their proposed fuel tax hike is yet another point of disagreement for Washington politicians.
Are the Highways That Bad?
While congress and the administration debate the finer points of funding the nation’s highway system, others ask if it’s really as bad as they say it is. Though the Highway Trust Fund is nearing insolvency, what are the conditions of the nation’s highways?
According to a new analysis by the Federal Highway Administration, the numbers don’t look good. The report shows that across the United States only 38 percent of roads and highways are in “good” condition.
Roads and highways that have pavement in “poor” condition show “advanced deterioration” and typically require expensive structural repair or complete replacement. These roads commonly have ruts, cracks, potholes, and ripples that increase the cost of vehicle maintenance and fuel consumption.
Unfortunately state, federal and local funding has not kept up with the pace necessary to ensure safe roads. Approximately $85 billion annually is the required to make sure the conditions of roads, highways, and bridges meet even the most basic standards.
How the funding will end up coming about and whose plan wins out is a story for another day. Until then the trucking industry will quietly keep commerce moving with the roads it’s given.