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Artba Urges Pay-As-You-Go System


On June 30, American Road & Transportation Builders Association testified before the National Commission on Fiscal Responsibility and Reform

On June 30, American Road & Transportation Builders Association testified before the National Commission on Fiscal Responsibility and Reform.

For more than 50 years, the federal highway, transit and aviation investment programs--financed almost exclusively by gasoline taxes and fees levied on users--have proven to be fiscally responsible while providing critical improvements to the nationís transportation infrastructure. Such a pay-as-you-go transportation financing system has no net impact on the budget deficit and should continue to be the means for future investments, ARTBA told the commission.

The bipartisan commission was created by an executive order from President Obama and is charged with addressing the nation's mid- and long-term fiscal challenges, and making policy recommendations to the president and Congress. The group, chaired by former Sen. Alan Simpson (R-Wyo.) and Erskine Bowles, a former chief of staff to President Clinton, held a public meeting on Capitol Hill.

The Congressional Budget Office says $90 billion in new revenues are needed at the federal level over the next six years just to maintain current highway, safety and transit investment levels. However, the projected Highway Trust Fund revenues for the foreseeable future will be far short of the levels necessary to maintain current physical and performance conditions. Without additional revenues, Congress has only two options--fund the programs at the level supportable by Highway Trust Fund revenues, which would cause serious deterioration of our highways and transit systems, or close the gap with general funds, which would significantly increase the federal budget deficit, ARTBA said.

One of the most reliable ways to reduce the deficit, ARTBA noted, is to assure the future budget neutrality of the federal transportation investment programs by generating additional user fee revenues, through any of a number of options. Among them: increasing federal gasoline and diesel taxes and index them to inflation, establishing a freight services charge on the value of transportation provided by commercial trucks to support a new goods movement program such as the associationís Critical Commerce Corridors program, and creating a per barrel tax on oil.

Expanded public private partnerships and tolling are also additional mechanisms that would supplement the traditional means of financing transportation improvement programs.