DALLAS – President Trump's infrastructure proposal's reliance on public-private partnerships to rebuild America's crumbling highways would provide limited benefits to urban areas while leaving rural states out of the mix, according to a coalition of truckers and shippers opposed to tolls on interstate highways.
The coalition raised the issue in a letter sent to members of the House Transportation and Infrastructure Committee before Japan's Prime Minister Shinzo Abe is to meet with President Trump on Feb. 10 to discuss infrastructure investments.
"Private investment in infrastructure is not the panacea it is often touted to be, as self-interested private corporations would only focus on our most profitable (i.e. urban area) projects and leave rural states out in the cold," the group told the lawmakers.
The basis of the infrastructure proposal released by the Trump campaign in October is $137 billion of federal tax credits as incentives for up to $1 trillion of private investments in infrastructure over 10 years. The return to investors would have to be some form of tolling and fees, or regular availability payments from the state or local governments.
In its letter, the freight coalition said tolling is the least efficient way to fund infrastructure projects.
"Improving our roads and bridges requires a rational, methodical, long-term public strategy," said the coalition, whose members include the American Trucking Associations, the National Council of Chain Restaurants, and the Texas Trucking Association. "ATFI members have serious reservations about the potential for over-reliance on private investment to fund improvements to our highway infrastructure."
Committee chairman Rep. Bill Shuster, R-Pa., said during a hearing last week that interstate tolls "are a non-starter" for additional infrastructure funding. Shuster and many other congressional Republicans instead favor corporate tax reform as a potential major funding source.
A sizeable portion of the private investments envisioned in the Trump plan could come from Japan, according to reports in Japanese news outlets.
The reports said Prime Minister Shinzo Abe will present a proposal to President Trump when they meet Feb. 10 that includes $150 billion in investments in high-speed rail and other infrastructure over 10 years.
"I wish to discuss [Japanese] contributions toward improved productivity and competitiveness in the entire U.S. industrial sector, or a large framework that includes aid for infrastructure development," Abe told members of the Diet's lower house last week.
Shinichiro Mori, a spokesman for the Government Pension Investment Fund, denied reports that the fund would make investments as part of the Abe government's proposal.
"We do invest in infrastructure projects from a purely investment point of view, but we never, ever make an investment decision as part of government economic measures," Mori said.
Tolling and other forms of user financing are tools that states and localities should have access to, said Patrick Jones, executive director of the International Bridge, Tunnel & Turnpike Association.
"We look forward to ensuring that toll finance remains an important component of any proposal to rebuild our nation's transportation infrastructure," Jones said.
A study of interstate tolls by the Congressional Research Service last year said the cost of toll collection on existing roads exceeds 10% of revenues, even if tolls are collected electronically. This compares poorly to the 1% cost of collecting federal gasoline taxes, the report said.
Tolling all interstate highways in the U.S. would generate approximately $112 billion per year at the average per-mile rate levied by existing toll roads, the CRS said. Approximately $8 billion is already captured by toll roads, leaving about $104 billion per year of potential new revenues, the study said.
"Whatever policies Congress adopts, tolls are likely to play only a limited role in funding surface transportation projects," CRS said. "Many roads may not have sufficient traffic willing to pay a high enough toll to cover construction, maintenance, and toll collection costs."
