Trust Fund Problems Hyped, House Transport Head Says
By Sean McNally, Senior Reporter
This story appears in the July 9 print edition of Transport Topics.
WASHINGTON — A key congressional Democrat said dire pronouncements about the state of the Highway Trust Fund are driven by the Bush administration’s antipathy to a fuel-tax increase and its affinity for tolls and privatization.
In a June 19 interview with Transport Topics, Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, also said the panel’s efforts to limit the administration’s push for privatization were working.
The dire predictions about the poor health of the trust fund “are driven by the policy bent of this administration to dampen any effort to increase the user fee,” said Oberstar. “If they say, ‘The sky is falling. The trust fund is collapsing. We need tolls, or we need revenue bonds or we need tax credits,’ then you create the conditions for the outcome you’ve preordained.”
In a hearing June 7, Rick Capka, head of the Federal Highway Administration, told the House committee, “It’s clear that revenues are not keeping up with the current level of expenditure . . . and we may or may not get to the complete end of 2009 before we hit problems.”
In addition, both the Treasury Department and the Congressional Budget Office have said the highway fund could slip into deficit by the end of 2009, when current transportation spending legislation expires (4-10-06, p. 50).
“None of those predictions is accurate; the trust fund is doing well,” Oberstar said. “It is recovering from the post-Sept. 11 dip. Driving is up; vehicle miles traveled are up.”
Oberstar and other Democrats on the transportation committee have sparred repeatedly with the Department of Transportation over funding and privatization (2-17, p. 3).
DOT has included privatization and tolling as key components of its program to combat highway congestion, arguing that increased fuel mileage and recent efforts to reduce consumption of fossil fuels will reduce the effectiveness of the fuel tax in funding highways (1-29, p. 1).
“I don’t have those concerns, like when people raise alternative fuel. We’ve subjected ethanol to the user fee — that will recover something like $13 billion over the life of SAFETEA-LU,” Oberstar said. “Whether it’s hydrogen, we’ll do the same thing to hydrogen fuel. If it’s electric, we’ll figure out a way to tax the plug-in.”
“Whatever it is, it has to pay its way,” he said. “All those alternative [fuel] vehicles are putting pressure on the road structure and the bridge structure, and they have to pay their way.”
A DOT spokesman defended the agency’s examination and promotion of alternative revenue sources.
“The reality is that the gas tax is not a reliable and sustainable future revenue source, and we must look at other options for future financing,” Ian Grossman, associate administrator for the Federal Highway Administration, told TT June 29.
Oberstar and Rep. Peter DeFazio (D-Ore.), chairman of the panel’s Highways and Transit Subcommittee, sent a letter to states threatening to undo any partnership scheme that did not meet conditions the committee set (5-21, p. 4).
“They’re paying attention,” Oberstar said of the states’ response. “It’s amazing.”
Late last month, Pennsylvania lawmakers backed away from a plan to lease its turnpike, instead moving to create a public-public partnership to toll Interstate 80 and raise turnpike tolls on the road (7-2, p. 5).
Oberstar said that officials in New Jersey, which also had considered leasing its turnpike, told him that “they were headed down one path, got our letter, shifted gears and are moving in another direction.”
“We hoped that the letter would slow down public-private partnership initiatives that run afoul of some of the basic principles that we have set forth,” he said, noting the committee could take action in the next highway reauthorization bill to cancel any such deals.
“As states are considering initiatives, we’ll craft language in the next bill to void them,” Oberstar said, citing non-compete clauses as a major stumbling block for the committee.
“If a state wants to contract with a private operator to build a tolled road segment, the public sector should not be constrained by a no-compete clause,” he said.
The issue of funding is being studied by a national commission chaired by Transportation Secretary Mary Peters. Oberstar said that, though he has had concerns that the commission may reach “a predetermined outcome,” he is waiting for the panel’s report to Congress later this year.
This story appears in the July 9 print edition of Transport Topics.
WASHINGTON — A key congressional Democrat said dire pronouncements about the state of the Highway Trust Fund are driven by the Bush administration’s antipathy to a fuel-tax increase and its affinity for tolls and privatization.
In a June 19 interview with Transport Topics, Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, also said the panel’s efforts to limit the administration’s push for privatization were working.
The dire predictions about the poor health of the trust fund “are driven by the policy bent of this administration to dampen any effort to increase the user fee,” said Oberstar. “If they say, ‘The sky is falling. The trust fund is collapsing. We need tolls, or we need revenue bonds or we need tax credits,’ then you create the conditions for the outcome you’ve preordained.”
In a hearing June 7, Rick Capka, head of the Federal Highway Administration, told the House committee, “It’s clear that revenues are not keeping up with the current level of expenditure . . . and we may or may not get to the complete end of 2009 before we hit problems.”
In addition, both the Treasury Department and the Congressional Budget Office have said the highway fund could slip into deficit by the end of 2009, when current transportation spending legislation expires (4-10-06, p. 50).
“None of those predictions is accurate; the trust fund is doing well,” Oberstar said. “It is recovering from the post-Sept. 11 dip. Driving is up; vehicle miles traveled are up.”
Oberstar and other Democrats on the transportation committee have sparred repeatedly with the Department of Transportation over funding and privatization (2-17, p. 3).
DOT has included privatization and tolling as key components of its program to combat highway congestion, arguing that increased fuel mileage and recent efforts to reduce consumption of fossil fuels will reduce the effectiveness of the fuel tax in funding highways (1-29, p. 1).
“I don’t have those concerns, like when people raise alternative fuel. We’ve subjected ethanol to the user fee — that will recover something like $13 billion over the life of SAFETEA-LU,” Oberstar said. “Whether it’s hydrogen, we’ll do the same thing to hydrogen fuel. If it’s electric, we’ll figure out a way to tax the plug-in.”
“Whatever it is, it has to pay its way,” he said. “All those alternative [fuel] vehicles are putting pressure on the road structure and the bridge structure, and they have to pay their way.”
A DOT spokesman defended the agency’s examination and promotion of alternative revenue sources.
“The reality is that the gas tax is not a reliable and sustainable future revenue source, and we must look at other options for future financing,” Ian Grossman, associate administrator for the Federal Highway Administration, told TT June 29.
Oberstar and Rep. Peter DeFazio (D-Ore.), chairman of the panel’s Highways and Transit Subcommittee, sent a letter to states threatening to undo any partnership scheme that did not meet conditions the committee set (5-21, p. 4).
“They’re paying attention,” Oberstar said of the states’ response. “It’s amazing.”
Late last month, Pennsylvania lawmakers backed away from a plan to lease its turnpike, instead moving to create a public-public partnership to toll Interstate 80 and raise turnpike tolls on the road (7-2, p. 5).
Oberstar said that officials in New Jersey, which also had considered leasing its turnpike, told him that “they were headed down one path, got our letter, shifted gears and are moving in another direction.”
“We hoped that the letter would slow down public-private partnership initiatives that run afoul of some of the basic principles that we have set forth,” he said, noting the committee could take action in the next highway reauthorization bill to cancel any such deals.
“As states are considering initiatives, we’ll craft language in the next bill to void them,” Oberstar said, citing non-compete clauses as a major stumbling block for the committee.
“If a state wants to contract with a private operator to build a tolled road segment, the public sector should not be constrained by a no-compete clause,” he said.
The issue of funding is being studied by a national commission chaired by Transportation Secretary Mary Peters. Oberstar said that, though he has had concerns that the commission may reach “a predetermined outcome,” he is waiting for the panel’s report to Congress later this year.
