By David Bauer, senior vice president of government relations, ARTBA
President Obama Feb. 4 unveiled a sweeping new “21st Century Clean Transportation System” proposal that would boost transportation infrastructure investment and launch a series of transportation-related initiatives to combat climate change. The release of the plan comes two months after the president signed into law the five-year, “Fixing America’s Surface Transportation (FAST) Act highway/transit program reauthorization. The full details of the proposal, which is unlikely to pass in this election year, will be contained in the Administration’s FY 2017 budget proposal scheduled for release Feb. 9.
Unlike several past Administration transportation proposals, this one includes a specific strategy to generate the revenue necessary to support its investment levels. It continues Obama’s call to tax overseas earnings of U.S.-based multinational corporations to support a “temporary near-term surge in investment.” The plan also includes a proposed $10 per barrel of oil tax that would be phased in over five years. The per-barrel tax would support new investments, “while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.”
The oil tax was greeted with the usual anti-tax rhetoric from Republicans on Capitol Hill. ARTBA is consistently reminding all members of Congress that while the Highway Trust Fund has been temporarily stabilized under the FAST Act, annual revenue shortfalls will return soon and Congress will have to make up a gap growing to $18 billion per year. As such, any criticism of new taxes to support future transportation investments must be countered with this stark reality.
Based on material released from the Administration, the plan will include:
- $20 billion per year on top of existing investment levels for transit, high-speed rail, and other non-highway transportation options;
- $10 billion per year to incentivize state and local governments to advance eco-friendly transportation initiatives and establish new competitive grant programs to support land use strategies, “livable communities,” and resilience to climate impacts; and
- $2 billion per year to “launch a new generation of smart, clean vehicles and aircraft.”
Administration officials describe the plan as a needed departure from the focus of existing federal transportation policy. Obama aides advocated similar themes during the roll out of the Administration’s 2014 and 2015 “Grow America Act” reauthorization proposals. Few Grow America Act priorities were included in the FAST Act.
Obama Administration officials acknowledge the plan will not be acted upon this year, but say its release is intended to try to drive a discussion toward a new future for the federal transportation programs. It should be noted, however, the goals outlined for the Administration’s clean transportation plan are very similar to proposals from both Democratic presidential candidates.
ARTBA will provide a full report on the President’s FY 2017 budget proposal for the federal transportation programs once it is released.