Road builders propose dedicated user fees for freight infrastructure
A proposal by the U.S. road building industry would rely heavily on an assortment of user fees to fund freight-related infrastructure improvements.
Peter Ruane, president of the American Road and Transportation Builders Association (ARTBA), last Friday called on the federal government to initiate a 'Critical Commerce Corridors' (3C) program that would raise money during the next 25 years 'to deal with the impending tsunami of freight' from import trade.
The money would come from sources separate from the motor fuel excise taxes collected for highway and transit programs.
Shippers and carriers, faced with high costs from gridlock that prevent them from delivering goods to customers on time, would pay for improvements such as truck-only lanes, intermodal transfer stations, port and rail connectors, land border ports of entry, bridges and improvements to the Interstate highway system through a series of fees, including:
* A bill of lading tax.
* Weight-mileage based user fee.
* A freight transaction fee paid by shippers.
* Entrance or use fee for intermodal hubs.
* Additional customs fees.
* Federal user fees, such as increase in the diesel fuel tax.
* Selected use of federally imposed tolls.
* A mileage tax on truck travel in or on the designated corridor system.
ARTBA first proposed the 3C program to the National Surface Transportation and Policy Revenue Commission last November. Ruane took the opportunity of speaking before the Transportation Table luncheon sponsored by Traffic World magazine to aggressively publicize the idea and stir policy debate as Congress and interest groups start preparing to reauthorize surface transport programs in 2009.
Domestic freight tonnage on U.S. roadways is projected to double by 2035 and the volume of freight moving through the largest international gateways may triple or quadruple, according to the Federal Highway Administration. But very little additional highway capacity has been built during the past 30 years while population growth has led to many more vehicles on the road. The FHWA estimates that congestion costs the trucking industry almost $8 billion per year in extra fuel, labor and lost business.
Meanwhile, the Highway Trust Fund balance could be drained as early as 2008 or 2009, according to various estimates.
The U.S. government needs to 'dramatically increase' funding for the core highway programs by raising fuel taxes, in addition to starting the 3C program, Ruane said.
Under the ARTBA proposal, the Department of Transportation would convene meetings with state transportation departments, metropolitan planning organizations, shippers, truckers, logistics companies and others to identify the key segments to be funded in the 3C network, quantify the expected construction and maintenance costs, and recommend a priority schedule for undertaking projects. In 2011, the secretary of Transportation would submit separate implementation and financing plans to the Congress for approval. Funding for top tier projects would begin in 2012. The money would be “firewalled” for freight transportation infrastructure.
The plan comes as the Department of Transportation develops a national freight policy to target investment across states to meet critical needs. The department is trying to identify projects of national significance and has a 'Corridors of the Future' pilot program designed to target limited funds to high priority trade and travel lanes.
Ruane said he is encouraged that Congress, the infrastructure commission, the general business community and the public are beginning to focus on the potential crisis in transportation infrastructure and find ways to pay for the system.
Retailers and manufacturers are becoming more vocal about their need to address freight transportation capacity problems, and Ruane said he expects shipper support to make a major difference in the 2009 reauthorization process compared to 2005, when freight issues were heavily outweighed by funding for local roads and congressional pet projects.
The National Association of Manufacturers, for example, recently said its 2007 agenda includes the development of a '21st century transportation network by improving strategic intermodal links and upgrading overall capacity to move goods.'
'The problem has gotten so bad' that businesses 'just can't take it any more' and are willing to help the transportation providers and road builders make the case for upgrading the surface transportation system, Ruane said.
Transportation investment needs to be part of the debate in the upcoming presidential campaign, he said.
'We could take the Jack Bauer approach to get results' or we could try to convince the Congress they need to fund the system for the good of the country, 'Ruane said, referring to the bold character in the TV spy series '24.'
'We intend to take both approaches' to make sure transportation infrastructure gets attention, he said.
Ruane said his association will launch an education program for policymakers and the media to counteract the negative perception of the road building industry as supportive of paving over the country without regard to public benefit.
He said the industry has been 'reduced to a caricature' in the minds of politicians and others and that ARTBA must change its image if it is going to be successful in selling its ambitious agenda for transportation infrastructure.