WASHINGTON — Legislation recently introduced in Congress would transfer nearly all authority over federal highway and transit programs to states and substantially reduce federal motor fuel taxes over a five-year period.

The Transportation Empowerment Act was introduced Thursday in both congressional chambers by Rep. Tom Graves, R-Ga., and Sen. Mike Lee, R-Utah.

The sponsors touted the benefits of the bill, but experts on transportation and state and local governments warned it would harm the nation’s infrastructure system and hurt bond financings.

The bill would lower the federal gas tax to 3.7 cents per gallon from 18.4 cents per gallon and significantly decrease the tax on diesel. During the five-year period, states would see reductions in the amount of money sent to them for surface transportation from the federal government, but there would be less restrictions on how the money is used.

The lead sponsors of the legislation said it would reduce the bureaucracy involved in building transportation projects and give states more control and flexibility over transportation.

“Under the Transportation Empowerment Act, Americans would no longer have to send significant gas-tax revenue to Washington, where sticky-fingered politicians, bureaucrats, and lobbyists take their cut before sending it back with strings attached,” Lee said in a news release. “Instead, states and cities could plan, finance, and build better-designed and more affordable projects.”

“Our bill will streamline the highway program, allowing more projects to be completed at a lower cost,” Graves said. “This means commuters can move more easily between home and work, freeing up important family time and cutting out hours of frustration behind the wheel.”

However, experts on transportation and state and local governments said the bill would be harmful to the national transportation network.

“This is an extraordinarily bad idea and will undermine the economic growth and international competitiveness of the United States,” said Jack Schenendorf,  an attorney focused on transportation at Covington and Burling LLP here.

While there is red tape in the federal government, any benefits provided by the bill are far outweighed by the costs to the national infrastructure system that would result from the federal government failing to provide resources and direction for investment in the network, Schenendorf said. Without federal funds, states wouldn’t necessarily have sufficient resources to make the needed level of investment, and states they might prioritize other investments than those for the national infrastructure network, he said.

Janet Kavinoky, executive director of transportation and infrastructure for the U.S. Chamber of Commerce, said the group would strongly oppose the bill because the Chamber does not support devolution.

“What the nation needs is a long-term reauthorization bill that builds on the reforms in [the Moving Ahead for Progress in the 21st Century transportation law] and has predictable, sustainable, growing revenue to support state and local investments in the nation’s transportation network that connects businesses across state lines and to the global economy,” she said.

Frank Shafroth, director of the Center for State and Local Government Leadership at George Mason University, said there are a number of outstanding state and local government bonds for transportation that assume a level of federal commitment for the projects. He also said that the bill would likely result in state governments needing to raise taxes, and state politicians would be criticized for doing so.

“This bill could more appropriately be called the ‘pass the buck bill,’” he said.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.