DALLAS – A new federal fee on freight movements dedicated to long-term funding of transportation infrastructure could smooth the passage of tax reform legislation being considered by Congress this year, the American Road & Transportation Builders Association said in a letter to members of the Senate Finance Committee.

A 1% federal tax on shipping bills proposed by Rep. Alan Lowenthal, D-Calif., could generate $8 billion per year for transportation infrastructure projects.
A 1% federal tax on shipping bills proposed by Rep. Alan Lowenthal, D-Calif., could generate $8 billion per year for transportation infrastructure projects.
Virginia DOT

“We recognize that any tax reform legislation will be a heavy lift,” ARTBA president Peter Ruane said in a letter last week to committee chairman Sen. Orrin Hatch, R-Utah, and Sen. Ron Wyden, D-Ore., the panel’s leading Democrat.

“Adding significant Highway Trust Fund revenue modifications to the package that provides funding for transportation infrastructure investments in every state can only improve the odds of moving a tax bill through Congress,” he said.

Every increase in HTF-dedicated revenues over the last 30 years has been accomplished through larger deficit reduction or tax reform packages, Ruane noted.

Revenues generated by the proposed fee on shipping costs would be dedicated to modernizing the interstate highway system and the often-inadequate road connections to shipping points such as ports, rail yards, and airports.

“Combining public-private partnerships and regulatory relief with a robust and stable core of federal surface transportation funding program would ensure that all states benefit,” Ruane said.

States will have to begin cutting back on their transportation spending if a reliable revenue enhancement is not in place before 2015’s Fixing America’s Surface Transportation (FAST) Act funding law expires at the end of fiscal 2020, Ruane said.

“This situation puts American jobs at risk,” he said, noting that the HTF provides states with 53% of their total annual investments in highways and transit projects.

“The biggest challenge to transportation capital investment in the U.S. is the solvency of the HTF,” Ruane said. “Providing a permanent, sustainable revenue solution for the trust fund before 2019 should be a top tax reform priority.”

A sustainable, long-term funding solution is needed to bring the nation’s infrastructure to an acceptable condition, he said.

“By long-term solution, we do not mean a four- to six-year patch from repatriated overseas profits of a few large companies or some other one-off mechanism,” Ruane said.

"After more than $140 billion in general fund transfers to the HTF since 2008, it is time to end short-term thinking that just creates another revenue crisis for a future Congress to solve,” he said in the letter.

Some Republican lawmakers, including Sen. John Thune, R-S.D., chairman of the Commerce, Science and Transportation Committee, have said tax reform must be accomplished before lawmakers can get to infrastructure measures.

However, White House press secretary Sarah Huckabee Sanders said Monday that the Trump administration still intends to send its $1 trillion, 10-year infrastructure renewal proposal to Congress this fall as promised. The plan is expected to include at least $200 billion of additional, direct federal infrastructure spending.

“The president’s been very outspoken on the need for a massive overhaul to the country’s infrastructure,” Sanders said during the daily press briefing. “That certainly is still a priority, both legislative and in any capacity that he has the ability to carry that out.”

The ARTBA freight-fee proposal could be accomplished by legislation introduced on June 22 by Rep. Alan Lowenthal, D-Calif., that would levy a 1% tax on the cost of moving goods. Lowenthal said the tax, which would be paid by the owners of the cargo, would generate $8 billion per year dedicated to freight-related infrastructure projects.

The bill, H.R. 3001, would establish a Freight Transportation Infrastructure Trust Fund supported by the 1% tax. The revenue would be split between formula-based grants to states and competitive grants that would be available to local, regional, and state governments.

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