Rep. Lowenthal would tax cargo to fund freight infrastructure

The House legislator reintroduced a bill that could raise $8 billion each year.    Rep. Alan Lowenthal, D-Calf., has resubmitted legislation to raise $8 billion dedicated to multimodal freight transportation infrastructure.
   H.R. 1308, “Economy in Motion: The National Multimodal and Sustainable Freight Infrastructure Act,” would establish a Freight Transportation Infrastructure Trust Fund to be funded through a national 1 percent fee on the way bill – the transportation invoice – for goods moved more than 50 miles by ground transportation. The bill aims to increase transport efficiency while also addressing environmental and community impacts.
   Cargo interests have long petitioned Congress for a dedicated source of revenue to upgrade highways, bridges, rail and intermodal connectors that carry heavy concentrations of commercial traffic on key routes considered regional and national economic pipelines.
   Lowenthal first introduced the bill last fall to help frame the debate on infrastructure investment in the run up to this year’s expected writing of a reauthorization bill for surface transportation programs. In an interview with American Shipper at the time, the California Democrat said conservatives would be drawn to the bill because any new user fees would be firewalled for their intended purpose and help grow the economy.
   “A lot of this [anti-tax] feeling has to do with a lack of trust. I don’t think anybody in their right mind thinks that there is no role for federal tax dollars. The money goes to what it’s supposed to do. [Small-government Republicans] want their goods on time and efficiently, too,” he said.
   And this time Lowenthal has a Republican co-sponsor: Rep. Dana Rohrabacher of California.
   “Because we have been neglecting our infrastructure, the stresses and strains causing our roadways and bridges to deteriorate threaten our quality of life,” Rohrabacher said in a statement. “We cannot allow the transport of consumer goods, agricultural products, and industrial equipment to be taken for granted.”
   In early February, President Obama proposed a six-year $478 billion surface transportation bill that would bolster the faltering Highway Trust Fund with a one-time windfall associated with corporate tax reform and repatriation of foreign profits – a scenario few analysts expect to happen anytime soon given the differences on tax policy between Democrats and Republicans. The White House plan calls for $18 billion to be placed in a fund for regional freight transportation projects, especially on major corridors subject to bottlenecks. 
   The Highway Trust Fund is losing ground every year as state obligations for past projects exceed receipts from motor fuel taxes and excise taxes on commercial vehicles and truck tires. The trust fund needs about $15 billion in supplemental funding each year to keep pace with current project demand to repair aging infrastructure and keep up with population growth. The Congressional Budget Office projects the shortfall will exceed $132 billion by 2022.
   The trust fund’s buying power is succumbing to inflation and a decline in revenues because cars are more fuel efficient and the tax is assessed on a per gallon basis – 18.4 cents for gasoline and 23.4 cents for diesel. A majority of lawmakers remain reluctant to increase the gas tax.
   A gas-tax hike or a waybill fee, regardless of their merits, are sustainable sources of revenue, whereas the President’s plan provides a short-term injection of money and then would have to be revisited again in six years to identify other revenue streams.
   Lowenthal’s bill would create two freight specific grant programs. A formula-based infrastructure trust fund would distribute funds to states based on the amount of existing freight infrastructure within the state. To be eligible, states must develop comprehensive state freight plans and have state freight advisory committees. The state freight plans would need to include strategies to mitigate the environmental impact of freight transportation projects. Under the formula mechanism, states can also create partnerships to receive funding for multi-state plans.
   A second funding mechanism is a competitive grant program that would be open to all local, regional and state governments. It includes a 5 percent set-aside for electric-powered demonstration projects. Eligible projects include intermodal, port, inland waterway and airport facilities; first-and-last-mile connectors; and land ports of entry.
   Long Beach Mayor Robert Garcia and Port Director Jon Slangerup, the Los Angeles County Metropolitan Transportation Authority, and the Coalition for America’s Gateways and Trade Corridors are throwing their support behind the bill.
   “The city and port of Long Beach need funding to improve the Long Beach Freeway’s increasing traffic volumes, aging infrastructure and serious congestion,” Mayor Garcia said. “H.R. 1308 will provide an ongoing source of funding which will allow us to implement freight specific solutions, while delivering air quality benefits to the greater Long Beach community.”
   The bill will help American businesses become more competitive, CAGTC Executive Director Leslie Blakey said. “Unreliable, congested and inefficient goods movement infrastructure costs businesses, workers and consumers with a hidden tax that saps prosperity. When the government fails to invest in the engine that drives commerce, everyone pays the tax but no one takes responsibility for it.”