12-07-2002
TRANSPORTATION: A Bumpy Ride Over Transportation Taxes
Fasten your seatbelts, because next year Washington is due for one of its
wild legislative rides. Once every five or six years, Congress crafts a
new surface transportation reauthorization bill, which usually turns into
a grabfest for members to see how much pork they can take home. The last
reauthorization measure-the 1998 bill known as TEA-21-provided $218
billion for roads, bridges, and mass transit across the nation. Insiders
are predicting that the 2003 bill won't be much larger, and that's sure to
disappoint those who argue that America faces a big gap in transportation
investment.
With so much money on the table, the policy debates are sure to be
intense. During the 1998 reauthorization, then-Rep. Bud Shuster, R-Pa.,
(who chaired the powerful Transportation and Infrastructure Committee) and
other transportation advocates succeeded in placing a budgetary firewall
around the Highway Trust Fund to ensure that the fund's gas-tax revenues
would be used only for transportation. This time around, Washington's
transportation groups will be looking to maintain that firewall and to
protect the fund from being raided-an effort that is sure to anger the
congressional appropriators who want to reassert their influence over how
the money will be spent.
The big issue will be whether interest groups can find new revenues to
produce another hefty bill. These groups say that the country faces a
transportation investment gap, and they point to government studies
showing that just to maintain the present system, highway spending should
be almost $50 billion per year and public transit spending $11 billion per
year.
Current annual outlays in highway and transit spending, however, are $32
billion and $7 billion, respectively. To bridge the gap, some groups are
proposing tax increases to pump new money into the Highway Trust Fund. The
billion-dollar question is whether the Bush administration and Congress
would go along with a tax hike.
Associated General Contractors of America
As Washington's largest construction-trade association, the AGC represents
more than 30,000 firms, about 10,000 with some role in the transportation
business. And it's this size and reach that make the association so
influential; the AGC says it has members in every congressional district.
"That's deep grassroots," says Stephen Sandherr, the group's
CEO.
The AGC's members would profit greatly from increased transportation
spending, and the association has set its sights on a substantial
reauthorization bill. To come up with the revenue, the group proposes
tying the federal gasoline tax-currently 18.4 cents a gallon-to the
Consumer Price Index. The AGC says that the new formula would produce $15
billion more in revenue over the next six years. To get another $5
billion, the group has suggested making the adjustment for inflation
retroactive to 1997.
Sandherr says his group is trying to sell the proposal by reminding
members of Congress about the nation's vast transportation needs.
"We've got credibility," he said. "We don't fudge our
numbers." Sandherr says that his organization will be tapping into
its extensive grassroots network of AGC members-general and specialty
contractors as well as suppliers. "We are going to get them ginned
up."
American Road & Transportation Builders Association
If the AGC is the big guy on the block in the construction community, then
ARTBA definitely is the smaller and more vocal kid who likes to prove he's
the toughest in the neighborhood. Therefore, it's not surprising that this
group, which represents more than 5,000 members involved in transportation
construction, has rolled out a daring proposal to pay for new
transportation investment: It wants to raise the federal gasoline tax by
10 cents per gallon.
ARTBA's "Two Cents Make Sense" plan would hike the gas tax by
two cents per year over the next five years, producing nearly $60 billion
for highways by fiscal 2009 and almost $14 billion for public transit. The
administration is unlikely to support such a plan, and a recent defeat of
a similar referendum to increase gas taxes in Washington state has seemed
to dampen ARTBA's ambitious proposal.
But the association isn't giving up. It says it plans to educate members
of Congress about the country's transportation needs, and it's already
knocking on doors on Capitol Hill to get key members behind the proposal.
In addition, ARTBA is preparing to launch an advertising blitz with the
message that increased transportation spending will save lives by reducing
highway deaths and help the economy by creating more jobs.
"We have a few cards we haven't played yet," said Pete Ruane,
ARTBA's president and CEO, in reference to this blitz.
U.S. Chamber of Commerce
About two years ago, Ruane approached chamber President and CEO Tom
Donohue about becoming an ally and a key player in the transportation
funding debate. Ruane and other advocates for transportation spending
thought it would be important to tap into the chamber's impressive
lobbying and grassroots networks. They also thought that it would be far
more effective to have the entire business community leading the
charge-instead of the usual asphalt-and-pavement gang. That led to the
creation of a new chamber-led coalition group, Americans for
Transportation Mobility.
The coalition seeks to fight for more government investment in
transportation, which means a hefty authorization bill next year.
Currently, the coalition includes about 350 members, including such
transportation-sector heavyweights as ARTBA, the AGC, the Air Transport
Association, and the American Public Transportation Association. In a
strange-bedfellows alliance, the chamber was able to rope in such key
groups in organized labor as the Teamsters, the United Brotherhood of
Carpenters and Joiners of America, and the Laborers' International Union
of North America. Ed Mortimer, a former ARTBA lobbyist, is managing the
coalition. Chamber transportation lobbyist Ashley Miller will play a key
role in twisting arms on Capitol Hill.
As the chief organization representing America's business community, the
chamber has enormous clout inside and outside Washington. But the
chamber's heavy involvement in the transportation funding battle also
presents a problem: Business has never been enthusiastic about tax
increases, and that's a key reason the chamber hasn't endorsed any plan
that would increase gas taxes. Still, the chamber and its new coalition
will be pushing for increased transportation spending. "We want to
increase investment and utilize all the revenue in the trust fund,"
Mortimer said. The coalition will be working to spread this message not
only to Congress but also to state and local chambers of commerce.
American Public Transportation Association
In the reauthorization debate, highways tend to get most of the attention,
but mass transit also has an integral role. Washington's chief player in
transit is APTA. This association represents about 1,500 members-from bus,
rapid transit, and commuter rail systems to the unions and local
organizations responsible for planning, building, and running these
systems.
Like the other transportation interest groups, APTA wants a large
reauthorization bill, because the bigger the entire pie, the bigger the
slice that goes to public transit. In October, APTA President William
Millar announced that his group's reauthorization proposal is to double
federal transit spending from today's $7 billion a year to more than $14
billion by fiscal 2009. "You can't expand the system unless there is
more investment," he said. "It needs more money, and we are not
shy about saying that." Like the chamber, however, APTA hasn't yet
taken a position on the best way to increase the government money
available for surface transportation. Instead, APTA has formed a revenue
task force to identify a preferred funding mechanism, and the task force's
recommendations are due to be released in December.
APTA has positioned itself to do well in the reauthorization fight. It has
natural allies among liberals and environmentalists who favor mass
transit, and by dint of its membership in the chamber coalition, it has a
cozier relationship with the highway gang.
Surface Transportation Policy Project
This group is the environmental enforcer in transportation reauthorization
debates. STPP-whose steering committee includes members of the Sierra
Club, Friends of the Earth, and the Natural Resources Defense
Council-defines its mission as working to protect the environment,
conserve energy, and make communities more livable. In other words, STPP
wants to curb urban sprawl.
One of the group's top goals in next year's reauthorization battle is to
strengthen the environmental laws and regulations that govern
transportation construction. On this point, STPP will be lining up against
groups such as the AGC, ARTBA, and the chamber, which want to cut some of
the government red tape they say stalls construction of new roads and
bridges. STPP says that the pro-construction groups want to gut these
environmental laws. The STPP wants more resources devoted to improving
mass transit and fixing existing roads, not funding projects that add more
asphalt and concrete to our highway system. Therefore, STPP is reluctant
to support methods that produce additional transportation revenue until
there is better accountability of how these huge sums are spent.
The STPP usually wields a lot of influence within the Senate Environment
and Public Works Committee (the transportation bill's authorizing
committee in the Senate), because many of the senators on the panel have
traditionally hailed from the more liberal and public-transit-minded
Northeast. The November elections, however, brought bad news for the STPP:
With the GOP in control in the Senate, the committee's new chairman is
Sen. James M. Inhofe, R-Okla., a pro-development conservative who won't be
as environment-friendly as past chairmen. Yet Kevin McCarty, the group's
senior director of federal policy, notes that the STPP has always had its
work cut out for it in any reauthorization debate. He says that some of
the issues the STPP has raised over the years "have not reached the
level of attention that they deserve."
Mark Murray
National Journal
