The Winding Road to Reauthorizing the Highway Trust Fund

With the 33rd temporary extension of the MAP-21 legislation set to expire at the end of July, Congress has been a flurry with activity to find a longer-term solution for the Highway Trust Fund. It has been a full decade since the last time Congress passed a highway funding bill lasting longer than two years. A six-year bill is the ultimate goal for those wishing to bring some stability to the funding states receive for important construction and maintenance projects.

Two significant Congressional hearings took place last week. On Wednesday, the House Ways and Means Committee held an impassioned hearing on revenue options. Committee Chairman Paul Ryan (R-Wis) set the tone at the onset by reiterating his strong opposition to raising the gas tax. This was followed by testimony from expert witnesses representing a variety of viewpoints and tough questions from members of the committee. Chad Shirley from the Congressional Budget Office provided updated statistics and data on the status of the Fund. Bill Graves of the American Trucking Association focused on the necessity of raising the gas tax to keep pace with inflation and infrastructure needs. Robert Poole from the Reason Foundation, a libertarian think tank, delved into the importance of maintaining and strengthening the user pays system and exploring new mechanisms such as mileage-based user fees and expanded use of public private partnerships. Poole also highlighted the importance of focusing spending on essential programs, recommending the following guidelines:

  • Maintaining and upgrading the Interstate highway system
  • Coordinating multi-state highway and bridge projects
  • Fostering freight corridors to enhance interstate commerce
  • Funding transportation research and safety efforts

The following day, the Senate Finance Committee held a similar hearing. Chairman Orrin Hatch’s (R-Utah) opening statement emphasized his commitment to finding a long-term solution. Former Secretary of Transportation Ray LaHood delivered remarks and answered many questions from committee members. LaHood was outspoken in his support of the gas tax and his opposition to devolution. In contrast, well-known economist Stephen Moore expressed strong support for devolution. Many of the other comments underscored the economic development impact of properly funded transportation systems.

This week promises to be equally active. The Senate Environment and Public Works Committee is set to mark-up its own version of a reauthorization bill on June 24. That same day the Select Revenue Measures Subcommittee of the House Ways and Means Committee will hold a hearing on Repatriation of Foreign Earnings as a Source of Funding for the Highway Trust Fund. Subcommittee Chairman Dave Reichert (R., Wash.) said his panel will examine “whether we could finance a multi-year highway bill as we make our international tax system more competitive.” While almost everyone agrees with the need to reform corporate taxation in the U.S., taxing profits earned by U.S. corporations overseas has long been a controversial proposal. Finding a compromise that makes the U.S. corporate tax code fairer and more competitive while simultaneously bringing in more revenue for the Highway Trust Fund will almost certainly take more than the six weeks available until the current extension expires.     

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