As House and Senate conferees plan to begin negotiating to produce a final tax-cut bill both chambers can pass, the trade group representing state departments of transportation urged lawmakers to consider "the urgent need to address the nation's transportation investment crisis."
In a Dec. 8 letter to congressional leaders and members of the tax bill's House-Senate conference committee, the American Association of State Highway and Transportation Officials noted that "this is the most significant tax reform effort in 31 years" and a rare chance for Congress to include revenue provisions to increase transportation infrastructure investment.
AASHTO noted that a tax bill could both bolster the ailing account that handles most federal highway and transit funding, and provide funding for a major project investment program that President Trump has promised.
However, said the letter signed by AASHTO Executive Director Bud Wright, "we continue to be extremely dismayed that Congress has failed to use this unique opportunity to address the looming solvency crisis facing the federal Highway Trust Fund (HTF), which provides much-needed transportation investments across the country."
[-That and other AASHTO letters to Congress and to regulatory agencies are available at the AASHTO Comment Letter Portal website.-]
AASHTO noted that the trust fund, facing a revenue shortfall after 2020, is on course "to cut federal highway funding by 40 percent in 2021 and zero out federal transit funding completely from 2021 to 2023."
It added: "Congress cannot allow these kinds of draconian cuts to take place," and that avoiding it in a comprehensive tax reform bill "is profoundly disappointing and may have serious implications for fixing the HTF in the future."
AASHTO noted that neither House nor Senate bills provide "any kind of funding allocation or fiscal space for a future infrastructure investment proposal."
The association said that "any successful infrastructure investment plan must include additional federal funds, and we remain concerned that Congress will not have the appetite nor ability to raise those funds once the tax reform effort concludes."
AASHTO said it remains concerned about provisions tax writers included that would make it harder for states, local governments and private entities to invest in transportation projects.
Both versions of tax reform would end a tax exemption for advance refunding of government bonds, AASHTO said, a mechanism some state DOTs and other agencies have used to refinance existing bond debt at lower interest rates and later inveset the savings into new project spending.
And the House version would end the use of tax-exempt private activity bonds that help pay for a range of projects that draw private investment including toll roads, bridges, some transit or commuter projects and private freight intermodal yards.
The House bill would also, AASHTO said, "delete the sections of the Internal Revenue Code that authorize tax credit bonds . . . another example of the bill eliminating beneficial financing options that can supplement existing tax-exempt municipal bonds. By providing more investment options through the tax code, tax credit bonds hold the potential to further encourage institutional and individual investors to put their money into building and rebuilding America's infrastructure."
The association said the bond provisions would make "significant changes to some of the federally supported financing mechanisms used for transportation projects."
It told lawmakers that "rather than making project financing more difficult, Congress should instead encourage the leveraging of scarce resources wherever appropriate."
AASHTO urged Congress to "carefully reconsider taking steps" that impede the ability of transportation stakeholders to invest in infrastructure improvements.
Officials from the Nebraska Department of Transportation and the Michigan Municipal League told a Senate hearing they need the federal partner to provide "certainty" in infrastructure funding, along with flexibility to keep project decisions as much as possible below the federal level.
March 16, 2018
Led by Tennessee Department of Transportation Commissioner John Schroer and Colorado DOT Executive Director Michael Lewis, a group of industry stakeholders strongly called for Congress and President Trump to come up with enough long-term highway and transit revenue to avert a funding crisis in 2020.
March 9, 2018
The U.S. Department of Transportation said March 9 that it awarded nearly $500 million in fiscal 2017 TIGER grants to 41 recipients in 43 states, including to some projects directly sponsored by state DOTs.