DOT chief: Highway funding patches ‘misguided’

Transportation Secretary Anthony Foxx thinks temporary transportation spending patches are “misguided” attempts by Congress to solve the nation’s infrastructure funding problems. 

“The highway trust fund has been roughly running $15 billion short on an annual basis. And in recent years, Congress has tried to patch it together, using a variety of legislative duct tape and chewing gum to just keep it afloat,” Foxx said during a speech to the Council on Foreign Relations on Monday evening. 

“I think it is misguided on our part as a country to think that plugging the highway trust fund is a substitute for making the investments in our infrastructure that we should make,” Foxx continued. “Somewhere along the lines, we got this impression that, if we just got the trust fund plussed up, that would solve our problems. And the reality is, is that the spending levels of the trust fund, even according to CBO [the Congressional Budget Office], if you just got the trust fund leveled off into last year’s numbers, you’d still be about $11 billion or $12 billion short in terms of just the maintenance that needs to happen on an annual basis in this country.” 

{mosads}Federal transportation funding is currently scheduled to expire on May 31. The Department of Transportation has said its Highway Trust Fund will run out of money at that time without congressional intervention, and Congress is racing now to meet the deadline. 

The traditional source of transportation funding since the 1930s has been revenue that is collected by the 18.4 cent-per-gallon federal gas tax. 

The gas tax has not been increased since 1993, however, and its purchasing power has been sapped by increases in auto fuel efficiency in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion at its current rate. 

Transportation advocates have pushed for a gas tax increase, but Foxx has been trying to convince lawmakers to approve a four-year, $478 billion transportation bill that has been proposed by President Obama that leaves the gas tax unchanged. 

The Obama measure relies on taxing corporate profits that are stored oversees to supplement the gas tax revenue — and avoid asking drivers to pay more at the pump to finance road projects.   

The proposal, known as “repatriation,” would require companies to bring back earnings to the United States at a 14 percent tax rate, generating an estimated $238 billion in revenue for the government that administration officials say could be used to pay for infrastructure improvements.

Budget groups and transportation advocates have labeled the repatriation proposal a one-time “gimmick” that would not solve the nation’s long-term infrastructure funding woes. 

Lawmakers have, meanwhile, largely ignored the Obama proposal as they search for their own way to pay for a transportation funding extension. 

Foxx said in his speech that it is time to re-evaluate the gas tax’s position as the primary driver of federal transportation funding, although he is not in favor of increasing the fuel levy now to boost spending.  

“I think the problem we have is that everyone wants things to be like they were in 1956, and we’re not in 1956 anymore. We’re in 2015,” Foxx said. 

“The reality is, I think we’re going to have to have a different system,” the DOT chief continued. “And you know, look, we’ve proposed a system that would at least for six years give us, you know, a substantial bump in the amount of money that goes into our trust fund using pro-growth business tax reform.”