Highway funding bill needed soon

If both House and Senate committees don't have a new six-year highway reauthorization bill ready by June, it's unlikely to happen in 2011 and might well be put off until 2013

If both House and Senate committees don’t have a new six-year highway reauthorization bill ready by June, it’s unlikely to happen in 2011 and might well be put off until 2013, according to a top lobbyist for the transportation construction industry. Both houses of Congress have indicated that they want to pass a transportation funding bill this year, as has the Obama Administration, but views on funding levels vary widely, said Dave Bauer of the American Road and Transportation Builders Assn.

The lead committee on transportation funding in the House has indicated that it wants to have a bill ready by June, but has not offered any specifics about funding levels or revenue mechanism, Bauer said during a briefing sponsored by the analysts Jefferies Industrials. With the new Republic majority in the House pushing “a do more with less philosophy,” he believes their reauthorization could be limited to current revenue projections for the highway trust fund generated by existing fuel taxes.

With slowing growth in U.S. fuel consumption and fuel-tax revenues, such an approach would require cuts in spending for transportation infrastructure construction and repair, Bauer said. Current spending levels set by the 2005 highway reauthorization act have been outstripping tax revenues and would burn through a current highway trust fund surplus by the end of fiscal year 2012, he pointed out.

The Obama Administration has publicly called for a sharp increase in transportation investment, proposing $551 billion in spending over the six years covered by a reauthorization bill. “The elephant in the room is how to pay for it,” said Bauer, who pointed out that the Administration has yet to offer specifics on raising the additional required revenue.

The third party in the process, the Senate, has yet to address specifics of a new reauthorization bill other than indicating that it wants to pass one by the end of the year. Bauer expects the Senate to come up with a proposal that sets spending somewhere between the House and Administration.

The good news is that all three – the Senate, House and Administration – say they want to pass a reauthorization bill in 2011, Bauer said. Spending on highways and other transportation infrastructure is also politically popular because it’s tied closely to jobs and economic well-being, he said.

If no reauthorization bill is enacted in 2011, “the perception is that it will be impossible in 2012” since additional revenues are likely to be required, and neither party will be anxious to talk about new tax proposals in a presidential election year, Bauer told the analysts. “That’s not necessarily so,” he said. “It does get harder, but that doesn’t mean it’s impossible.”

There have been multiple proposals on how to raise revenues for transportation construction, including an increase in the fuel tax, mileage-based taxes and additional oil taxes, he pointed out.

“There have been a whole host of suggestions, but we’re probably not going to see this discussion take place in public,” Bauer said. “It’s more likely we’ll see [the House and Senate] move forward with a [reauthorization] bill, while they work quietly on how to pay for it.”

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