By Dave Bauer, senior vice president of government relations, ARTBA
The ENO Center for Transportation, a Washington, D.C.-based transportation think tank, released a report May 19 that proposes a “Cost of Freight Shipment” (COFS) fee to support expanded federal investment in projects to improve freight flows on all modes of transportation infrastructure. The COFS, as described in “Delivering the Goods: Recommendations for Funding a Federal Freight Program,” would impose a 0.3 percent fee on the shipment cost of all modes of freight transportation.
According to ENO, the fee would generate an additional $1.1 billion to expand funding for the FAST Act’s Nationally Significant Freight and Highway Projects (NSFHP) Program to $2 billion per year.
As currently structured, the program is primarily focused on large scale ($100 million or more) highway and highway-related freight projects, with just over 10 percent of its resources being eligible for freight rail, port and intermodal projects. Under the ENO proposal, all modes of transportation would be eligible for grants from the major projects program without restriction. ENO also recommends using federal general funds to support increased NSFHP investment until their proposed freight fee is in place.
ARTBA unveiled in 2009 a new proposal for a dedicated freight fee that would charge a one-two percent fee on the cost of truck transportation for freight shipped in the U.S. to support highway-related freight improvements. The association commissioned the national consulting firm PriceWaterhouseCoopers—PwC—to develop the details of the plan and project its revenue impact. According to PwC, a one percent “Highway Transportation Services Tax” would generate between $6 and $7 billion annually for highway freight improvements. ARTBA continues to promote the concept and one member of Congress—Rep. Alan Lowenthal (D-Calif.)—has introduced legislation based on the proposal.
While ARTBA’s initiative would generate more revenue and is structured as a highway/transit reauthorization proposal intended to address roadway freight impediments, the ENO plan is similar in that both would generate revenue from the value of the transportation service being provided. The federal government currently levies a similar tax on air cargo shipments that supports airport infrastructure investment. The advantage of these approaches is that they underscore the economic contribution of freight-related infrastructure investments and retains the user concept of those that benefit from these facilities pay for their improvement.
ARTBA is continuing to promote this and other initiatives to secure a permanent revenue fix for the Highway Trust Fund’s structural deficit well before the FAST Act’s expiration in 2020.