Last month, the American Public Transportation Association (APTA) joined state DOTs, transportation and construction unions, and concrete, highway, asphalt, stone, and gravel lobbyists to call for a “rewrite” of the energy bill recently introduced by Senators Kerry and Lieberman. The American Power Act would set aside up to $6.25 billion for the transportation sector from taxes on oil refineries, split the following ways:
- Roughly 1/3 for Highway Trust Fund w/ strings (applied to projects that “shall be used to promote the safety, effectiveness, and efficiency of transportation”)
- Roughly 1/3 for TIGER (Transportation Investments Generating Economic Recovery)
- Roughly 1/3 for CLEAN-TEA (competitive clean transport and land use grants)
Even though transit projects have a competitive advantage in all of the above funding streams, APTA joined AASHTO and the road lobby in criticizing the Kerry-Lieberman bill on two counts: 1) the total set aside for transportation is too low; 2) all revenues for transportation should go directly into the Highway Trust Fund (the main source of funds for both highway and transit projects), not split up to programs that incentivize low carbon transportation projects.
Many transportation advocates agree that the current $6.25 billion set-aside can be higher. However, this proposed amount is the highest transit stands to gain compared to all previous energy/climate bills. It is more than the 1% for transportation in the House proposal in June 2009 and more than the 3% for transportation under the Boxer-Kerry proposal in October 2009.
APTA’s stance could cost transit agencies. APTA estimates that by 2013, the taxes on oil refineries proposed in the energy bill would generate up to $19.5 billion in revenue. If the energy bill is rewritten to their wishes, all of that revenue would go straight into the Highway Trust Fund. Following the longstanding 80/20 split of Highway Trust Fund revenue, this would yield only $3.9 billion for transit and $15.6 billion for highways. If the groups do not win more than a modest expansion of the transportation set-aside, but all of the set-aside is funneled into the Highway Trust Fund, transit agencies would receive far less:
|Theoretical Funding Scenario||Annual Transportation Revenue, 2013|
|American Power Act as written||$6.25B for “clean transportation”|
|No increase in transportation set-aside from energy bill, all revenue to Highway Trust Fund (80/20 split)||$1.25B for transit, $5B for highways|
|Increase in transportation set-aside to $19.5B, all revenue to Highway Trust Fund [AASHTO/APTA recommendation for energy bill]||$3.9B for transit, $15.6B for highways|
Change is Hard
Less mystifying is the support from AASHTO and the road building lobbies, since the industry groups’ position is essentially a call to prevent all change in how transportation projects are funded. In a joint letter to Senators Kerry and Lieberman, the groups warned that the American Power Act would “impose new fees on surface transportation system use and dedicate the vast majority of resulting revenue to activities entirely unrelated to improving the nation’s transportation infrastructure. This significantly undermines the user fee principle for financing federal transportation improvements that has served our nation and our economy well for more than 50 years.”
By funneling the refinery tax into the Highway Trust Fund, the groups’ rewrite could turn the energy bill into a handy funding stream for the highway-widening agenda advanced by AASHTO earlier this year. AASHTO executive director John Horsely suggested that dedicating more of the refinery tax to transportation could jump-start stalled negotiations on the next federal transportation bill. Maybe, but that’s an argument for increasing the amount of revenue in the bill that goes to transportation — not handing state DOTs a blank check.
What Senators Kerry, Lieberman, and CLEAN-TEA supporters get right is that policymakers cannot tackle climate and energy without addressing transportation, which makes up 30% of the country’s carbon footprint. Climate legislation needs to tilt the playing field towards cleaner transportation projects, like transit and high-speed rail.