Why We Need a User Fee Increase to Support Infrastructure Investment

Dec 4, 2013

Photographer: Frank Polich/Bloomberg News

The U.S. Chamber supports federal investment in highways and transit because a well-designed, modern infrastructure enables the business activity that leads to economic growth. The federal government is an important partner with states, locals, and the private sector in delivering a safe, efficient, reliable, connected transportation network.

States and localities - the recipients of federal transit, safety, and highway program dollars - "cannot,” as Tom Donohue first said in 2007, “…treat infrastructure like other problems or programs where you can wait until the very last minute and then write a big check. Infrastructure projects require foresight and years of careful planning.”

This is precisely why predictable, sustainable, growing sources of revenue are needed to support the federal Highway Trust Fund.

The Congressional Budget Office laid bare the Highway Trust Fund situation we face in 2014 and the three paths to choose from:

  • One: cut back programs to fit available resources,
  • Two: continue general fund transfers, or
  • Three: increase existing user-related revenue sources or find new ones.

We believe that Rep. Blumenauer has chosen the right path. The introduction of his legislation will generate constructive conversation. The Chamber continues to support—as it has for many years—increases in user fees to support federal investment in highways, highway safety, and public transportation.

What about those who say that the Highway Trust Fund problem can be solved by belt-tightening and reform? MAP-21 made historic reforms to federal programs, and there is always room for more improvement. But reforms won’t fill a $15 billion per year hole in the Highway Trust Fund, which is the difference between maintaining current spending and what is supportable with existing resources.

What about letting the private sector do it? One, the private sector is not a charity. When it invests it expects a return. Two, public-private partnerships require both the public and the private sectors.  Business is not going to step up if government is non-committal. And three, public-private partnerships can address some of the nation’s needs, but they will not deposit revenues into the Highway Trust Fund.

What about asking states and locals to do more? Many of them are. But devolution would simply pass the buck to governors and mayors, state legislatures, and city councils.

And for those who agree that we need to maintain and grow federal investment but do not like this particular proposal, there is no shortage of research that looks at the questions of “who pays, for what, how much, and by what mechanism?” We are open to looking at options, but gasoline and diesel taxes are the most transparent, honest, and implementable way to address our immediate and near term problems.

One thing is for certain: there is no free lunch. 

There is no “creative option.” 

And there is no avoiding the revenue discussion.

 

 

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