11-16-2002
TRANSPORTATION: A New Roadblock for the Highway Lobby
Last Tuesday, voters did more than tilt the political balance of power
back to the Republicans. They also sent a message about transportation
investment: They might want new roads and more mass transit, but they
don't want to pay for them through higher taxes. And consequently,
Washington's influential asphalt-and-pavement gang might have a much
harder time persuading Congress to pass the huge increase in spending that
the lobbyists want in next year's important surface transportation
bill.
To boost the overall size of the reauthorization bill, transportation
groups have floated some intriguing proposals. The American Road &
Transportation Builders Association, for example, advocates increasing the
federal gasoline tax by 2 cents per gallon for each of the next five years
in order to boost annual highway spending to $60 billion and to up transit
spending to almost $14 billion by fiscal 2009. The Associated General
Contractors of America, meanwhile, has proposed raising transportation
investment by tying the federal gas tax to the Consumer Price
Index.
According to these groups, America is facing a transportation investment
gap. They point to government data showing that, just to maintain the
current transportation system, federal highway spending should be at
nearly $50 billion per year and transit spending should be at $11 billion
per year. Current annual highway spending, though, is $32 billion, and
transit is getting just $7 billion a year. Aside from maintenance,
demographic projections suggest that the country will need even more
transportation investment to keep pace with growth: Over the next 20
years, the U.S. population is predicted to increase by 50 million, and the
ranks of registered vehicles are expected to grow by a similar
number.
Proposals to increase gasoline taxes to narrow the funding gap were
already going to be a tough sell. For starters, the slumping economy
certainly makes this a less-than-ideal time to raise taxes. Also, the
tax-cutting Bush administration might not be receptive to a boost in gas
taxes, especially since tax increases in 1990 (including a gas-tax hike)
contributed to the re-election defeat of the first President Bush-who had
famously promised "no new taxes." (See NJ, 9/28/02, p. 2809.)
The issue will also have to compete with a host of other matters facing
policy makers, including a possible war with Iraq, the rebuilding of
Afghanistan, and the growing federal deficit.
But selling a gas-tax hike appears to have become even more difficult
since November 5, when voters around the country defeated a handful of
high-profile tax measures meant to pay for increased transportation
investment. "People want better roads, but they are not willing to
pay for them," said Peter Loughlin, a lobbyist for the Associated
General Contractors. "Ultimately, you can't get something for
nothing."
In Northern Virginia, for example, voters defeated a referendum to
increase the sales tax by half a cent to finance a $5 billion
transportation package that would have extended the region's Metorail to
Tysons Corner and Dulles Airport. Residents in Hampton Roads, Va.,
rejected a similarly targeted sales tax measure. In Washington state,
voters soundly defeated a proposal to raise the state gasoline tax by 9
cents to help pay for a $7.8 billion transportation plan. And California
voters rolled back a measure that would have redirected revenues from auto
sales and leases to pay for transportation projects.
In each of these instances-particularly in Northern Virginia and
Washington state-the political and business establishments backed the
transportation plans; in fact, Washington's Democratic Gov. Gary Locke
called his state's proposal the most important ballot measure in
generations. But all of the plans were defeated by an unusual combination
of anti-tax conservatives and anti-sprawl environmentalists. "It was
a pretty clear message that voters aren't willing to build their way
out" of traffic congestion, said Aaron Ostrom, the executive director
of "1000 Friends of Washington," an anti-sprawl group, about the
defeat of the referendum in his state.
Even so, transportation interest groups aren't giving up, and they say
they have learned some important lessons from the Election Day defeats.
William Millar is president of the American Public Transportation
Association, which supports increased transportation funding but has not
yet specified how it would finance it. He explains that the real lesson
from the results in Northern Virginia and Washington state was that the
transportation advocates failed to sell their proposals to the voters.
"People have to understand what they're buying," Millar said,
"and they have to believe in what they're buying."
Indeed, in both of those referenda, voters had doubts that the revenue
from the new taxes would be used for transportation projects. They also
seemed to worry that the transportation packages were too skewed toward
building new highways. The proponents "completely missed the boat on
transit and transportation choices," Ostrom said.
Referendum advocates, however, disagree that their measures were just
about adding new roads. Supporters in Washington state contend that nearly
30 percent of their $7.8 billion package was targeted to bus service, HOV
lanes, passenger rail, and auto ferries. And proponents in Northern
Virginia say that 41 percent of their proposal was devoted to similar
efforts.
But Millar points out that it has been easier historically to sell
transportation funding increases to Congress than directly to voters. For
one thing, he says, the transportation interest groups in Washington are
more powerful than those at the state and local levels, and the House
Transportation and Infrastructure Committee-the single largest committee
in Congress-is chock-full of die-hard transportation advocates. Still,
ARTBA Vice President Matthew Jeanneret argues that lobbyists need to make
it a top priority to educate congressional lawmakers about transportation
investment, because about one-third of the members of the new Congress
were not in office during the 1998 reauthorization of the surface
transportation bill commonly referred to as TEA-21. "The challenge is
in the education we have to do," Jeanneret said.
Yet Andrew Johnsen, the transportation adviser to Gov. Locke, believes
that it was not just an ineffective sales job that doomed the referendum
in his state. He said the "very tough economy" in Washington
state also played a huge role. And the economic outlook will likewise play
an important role in the debate over the federal highway reauthorization
bill. If the economy continues to struggle, members of Congress will be
wary about imposing a tax that raises the amount American motorists pay at
the pump.
Still, there was some bright news on Election Day for transportation
advocates, as lower-profile measures at the local level fared pretty well
at the polls. In Miami-Dade County, voters approved a half-cent sales tax
increase to fund mass transit; in California's Riverside County, residents
voted to extend a sales tax increase to pay for nearly $5 billion in roads
and transit over the next 30 years; in Alaska, voters passed a measure
authorizing a bond issue for transportation projects; and in
Seattle-despite the rejection of the statewide measure-voters appear to
have approved extending the city's monorail. Indeed, according to an ARTBA
election analysis, voters approved 11 of the 24 state, regional, or local
ballot initiatives that called for increasing some type of tax to pay for
transportation projects.
ARTBA also notes that candidates who highlighted transportation were
successful on November 5. Rep. Robert L. Ehrlich Jr., R-Md., who made
solving traffic congestion one of his key campaign themes, captured the
Governor's Mansion in Annapolis. Sen. Frank Murkowski, R-Alaska,
emphasized improving his state's highway system on his way to his
gubernatorial victory. During his re-election campaign, Arkansas
Republican Gov. Mike Huckabee boasted about signing a state gas-tax
increase in 1999 to pay for road construction. And Rep. Anne Northup,
R-Ky., won a tough re-election battle by stressing her unwavering support
for building a second new bridge in her district.
With that kind of support for transportation investment, Jeanneret says,
ARTBA sees no reason to abandon its gas-tax-increase proposal-even though
some of the higher-profile referendums failed to pass. "The solution
here can't be to do nothing," he said. "Last week does not
change our focus at all."
Nevertheless, Jeanneret maintains that if Washington's road gang is going
to be successful in increasing the size of next year's reauthorization
bill, it will have to persuade the public and Congress that they need to
pay for transportation projects. "It was a challenge before the
election, and it's going to be a challenge after," he said.
Mark Murray
National Journal
