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 â A key congressional Democrat said dire pronouncements about the state of the Highway Trust Fund are driven by the Bush administrationâs 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 panelâs efforts to limit the administrationâs push for privatization were working.
The dire predictions about the poor health of the trust fund âare driven by the policy bent of this administration to dampen any effort to increase the user fee,â said Oberstar. âIf they say, âThe sky is falling. The trust fund is collapsing. We need tolls, or we need revenue bonds or we need tax credits,â then you create the conditions for the outcome youâve preordained.â
In a hearing June 7, Rick Capka, head of the Federal Highway Administration, told the House committee, âItâs 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.â
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).
âNone of those predictions is accurate; the trust fund is doing well,â Oberstar said. âIt is recovering from the post-Sept. 11 dip. Driving is up; vehicle miles traveled are up.â
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).
âI donât have those concerns, like when people raise alternative fuel. Weâve subjected ethanol to the user fee â that will recover something like $13 billion over the life of SAFETEA-LU,â Oberstar said. âWhether itâs hydrogen, weâll do the same thing to hydrogen fuel. If itâs electric, weâll figure out a way to tax the plug-in.â
âWhatever it is, it has to pay its way,â he said. âAll those alternative [fuel] vehicles are putting pressure on the road structure and the bridge structure, and they have to pay their way.â
A DOT spokesman defended the agencyâs examination and promotion of alternative revenue sources.
âThe 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,â Ian Grossman, associate administrator for the Federal Highway Administration, told TT June 29.
Oberstar and Rep. Peter DeFazio (D-Ore.), chairman of the panelâs 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).
âTheyâre paying attention,â Oberstar said of the statesâ response. âItâs amazing.â
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 âthey were headed down one path, got our letter, shifted gears and are moving in another direction.â
âWe 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,â he said, noting the committee could take action in the next highway reauthorization bill to cancel any such deals.
âAs states are considering initiatives, weâll craft language in the next bill to void them,â Oberstar said, citing non-compete clauses as a major stumbling block for the committee.
âIf 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,â 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 âa predetermined outcome,â he is waiting for the panelâs report to Congress later this year.
This story appears in the July 9 print edition of Transport Topics.
WASHINGTON â A key congressional Democrat said dire pronouncements about the state of the Highway Trust Fund are driven by the Bush administrationâs 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 panelâs efforts to limit the administrationâs push for privatization were working.
The dire predictions about the poor health of the trust fund âare driven by the policy bent of this administration to dampen any effort to increase the user fee,â said Oberstar. âIf they say, âThe sky is falling. The trust fund is collapsing. We need tolls, or we need revenue bonds or we need tax credits,â then you create the conditions for the outcome youâve preordained.â
In a hearing June 7, Rick Capka, head of the Federal Highway Administration, told the House committee, âItâs 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.â
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).
âNone of those predictions is accurate; the trust fund is doing well,â Oberstar said. âIt is recovering from the post-Sept. 11 dip. Driving is up; vehicle miles traveled are up.â
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).
âI donât have those concerns, like when people raise alternative fuel. Weâve subjected ethanol to the user fee â that will recover something like $13 billion over the life of SAFETEA-LU,â Oberstar said. âWhether itâs hydrogen, weâll do the same thing to hydrogen fuel. If itâs electric, weâll figure out a way to tax the plug-in.â
âWhatever it is, it has to pay its way,â he said. âAll those alternative [fuel] vehicles are putting pressure on the road structure and the bridge structure, and they have to pay their way.â
A DOT spokesman defended the agencyâs examination and promotion of alternative revenue sources.
âThe 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,â Ian Grossman, associate administrator for the Federal Highway Administration, told TT June 29.
Oberstar and Rep. Peter DeFazio (D-Ore.), chairman of the panelâs 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).
âTheyâre paying attention,â Oberstar said of the statesâ response. âItâs amazing.â
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 âthey were headed down one path, got our letter, shifted gears and are moving in another direction.â
âWe 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,â he said, noting the committee could take action in the next highway reauthorization bill to cancel any such deals.
âAs states are considering initiatives, weâll craft language in the next bill to void them,â Oberstar said, citing non-compete clauses as a major stumbling block for the committee.
âIf 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,â 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 âa predetermined outcome,â he is waiting for the panelâs report to Congress later this year.
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