Congress stalls on transportation funding

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From The Beacon, May 2015

The contrast between Capitol Hill and Beacon Hill, between the federal government and state and local government, could not be greater than the different approaches taken on the issue of transportation funding.

Here in Massachusetts, the governor and Legislature have just delivered an on-time allocation of $300 million in Chapter 90 funding to support the maintenance, repair and rebuilding of local roads all across the state for the 2015 construction season.

This began in January, when Gov. Charlie Baker released $100 million in Chapter 90 funds on the day he was sworn into office. Soon thereafter, Gov. Baker proposed another $200 million for the 2015 construction season, and the Legislature practically leapt at the opportunity, and quickly passed the measure. By early April, the $200 million bond bill was law, and communities were in line to receive their highest Chapter 90 allocation in history during 2015.

In addition, the Baker-Polito administration directed $30 million of the general transportation bonding authority enacted by the Legislature in 2014 to cities and towns to support winter storm recovery and repair measures on local roads. The recent brutal winter, with record snow and abnormally cold temperatures, was very hard on our streets, and springtime seems to be blooming more potholes than daffodils. The $30 million is designed to be a quick infusion to address the beating that our roads took.

That’s a total of $330 million in state funding to assist cities and towns in the repair and upkeep of 30,000 miles of local roads. All achieved in just a few months.

Much of this funding is possible because the state wrestled with the challenging issue of raising enough tax revenue to support investments in transportation infrastructure, and, in 2013, increased the gas tax by 3 cents. Legislators also voted to index the gas tax to grow with inflation, but that important component was narrowly repealed by the voters in the 2014 state election. Nevertheless, state leaders stood up and made the case for increasing the gas tax, and the result is hundreds of millions of dollars that can (and should) be used for maintaining our roadways.

Massachusetts is not alone. In the past year, at least five states have increased their gas tax, and two more (Minnesota and Michigan) are actively considering doing so in the next few months.

Why? Because our economy depends on a strong, modern, safe and efficient transportation system. Spending public money to build and repair roads is an effective way to create important middle-class construction jobs, and, in turn, these funds remain in the community to support local businesses. Further, these same local businesses rely on an up-to-date and safe transportation system to ship goods and ensure that their employees can commute to and from work efficiently.

Bad roads repel jobs. Good roads facilitate investment and attract employees.

That’s not too hard to understand, which is why it’s so disappointing that Congress is unable to display any leadership or progress on the issue of transportation.

Congress, led by Speaker John Boehner and Senate Majority Leader Mitch McConnell, is deadlocked on the issue of transportation funding, and the result has been an ineffective, rapidly lurching and volatile federal approach.

The U.S. Highway Trust Fund, which provides federal dollars for roads and transit, has teetered on the edge of insolvency for several years. The federal gas tax is insufficient to support federal funding for transportation (primarily for highways and roadways, transit and bridges). Tax collections are billions of dollars short and must be supplemented with other revenues from the budget.

Last year, in order to reauthorize the federal transportation funding law (MAP-21) and provide partial funding, Congress adopted a gimmick – pension smoothing – to support grants and reimbursements to states through May 31. The reason why they chose pension smoothing is clear: Few federal legislators want to vote to raise taxes, even though everyone on the planet knows that federal gas tax revenue has been declining as fuel efficiency has improved dramatically in recent years. And it certainly helped that pension smoothing is a complex and hard-to-understand gimmick, and thus is unlikely to raise objections among the general public.

Interestingly, the last president to push through a gas tax increase was George H. Bush, 25 years ago. But the courage to take a controversial vote on taxes has diminished dramatically over the years.

So here’s the situation: The federal highway trust fund is about to run out of money in the middle of the federal fiscal year. If Congress doesn’t reauthorize MAP-21 by May 31 and find a reliable funding source either through taxation or the general budget, then federal reimbursements and funding to states and localities will be in jeopardy.

According to the American Association of State Highway and Transportation Officials and the American Public Transportation Association, the nation needs approximately $163 billion per year for the construction and repair of highways, bridges and transit. But only about $105 billion is being invested on an annual basis.

That shortfall is crumbling our roads and forcing states to try and fill the gap – something that isn’t feasible. States are doing the best they can, but the federal government needs to step up to the plate.

The stakes are high for Massachusetts. We are slated to receive, on an annual basis, approximately $586 million to construct and maintain interstate, state and local roads, and several hundred million more to support public transit across the state. All from MAP-21.

But these funds are at risk because Congressional leaders have adopted a “no new taxes ever” position, even on the federal gas tax, which hasn’t been raised in decades.

They may think this is a good political strategy, but it is bad for our roads and bad for our country.